In Chapter 6 we noted that the form of recruitment known as the “kangany system” had become firmly established in Malayan plantations well before the abolition of indenture in 1910. The Sanderson Report of that year had commented that an increasing proportion of the estate workforce was being recruited under the kangany system, and had observed that this form of recruitment generally produced a more reliable and stable workforce than that obtained under indenture. The Committee had also commented that while kangany labour was popular with coffee and rubber planters, sugar planters were resolutely opposed to the system.

Kangany recruitment entered Malaya via Ceylon where it had been successfully used to procure labour for European-owned coffee estates. While a handful of Malayan planters had experimented with kangany labour in the early 1860s, the system did not achieve broad acceptance until the establishment of coffee plantations in the 1880s and 1890s. The introduction of rubber to the Peninsula in the 1890s coincided with a protracted downturn in coffee prices, and encouraged many coffee planters to convert their estates to the new crop with the consequence that rubber rapidly became the leading plantation crop in Malaya. In 1909–10 rubber entered a prolonged boom period. Rubber estates were invariably staffed by kangany labour. Until the abandonment of indenture, the two systems of immigration — indenture and kangany — ran parallel, with coffee and rubber planters importing kangany labour and sugar planters preferring indentured labour.

What was the kangany system? The term originates from the Tamil kankani, meaning owner or foreman. It is a word that connotes some degree of power and respect. Kanganies were “coolies of standing” who not only recruited labour to work on estates, but as field foremen (“headmen”) undertook to supervise those whom they had recruited. The kangany came from a non-Brahman “clean” (that is, non-polluting) caste, almost always drawn from the Vanniyar, Kallar or Goundar castes,8 and preferably headed a large family. He was a man who enjoyed a reputation for probity and fairness in his dealings, and who thus could be expected to command respect within his home taluk (district).

Immediately after the war, how could Japan secure the freedom of action to advance into Southeast Asia again when ill feelings towards the nation were prevalent? The answer seems to lie in the process of mutual persuasion between Japanese and U.S. decision-makers, who incorporated Prime Minister Shigeru Yoshida's “economics above all” principles and Washington's “superdomino” metaphor, bridging the two with the concept of U.S.-Japan economic cooperation. Consequently, a triangular, mutually reinforcing relationship among the United States, Japan, and Southeast Asia had come into existence and had become integral to American objectives in Asia, as the Joint Chiefs of Staff cogently put it in July 1952:

For Prime Minister Yoshida, U.S.-protected Southeast Asia was simply a region of abundant natural resources and of lucrative markets for Japanese products. The region was all the more important for the Yoshida government as a means through which to bring about economic success at home, which in turn could guarantee a conservative party's dominance in Japanese politics. In other words, Southeast Asia was an integral part of the Yoshida Doctrine, which consisted of three principles of foreign policy: (1) minimum defence, (2) economic development at home and economic diplomacy abroad as the ultimate goal, and (3) the separation of politics from economics. However, the very success of the Yoshida Doctrine brought home the fact that Japan's economic diplomacy needed a complete reappraisal in the early 1970s. Through stormy anti-Japanese movements, Japanese foreign policy was forced to make a gradual shift from bilateral to multilateral relations. Why and how did Japan decide to shift its foreign policy orientation? The answer can be found rather easily if we carefully examine the very first decade of Japan-ASEAN relations.

Some years ago, while undertaking research in the Oriental and Indian Office Collection Library in London, I uncovered a truly shocking passage contained within the 1957 Federation of Malaya Census Report. Noting that 4 million Indians had been recruited to work in colonial Malaya and that 2.8 million had subsequently returned to India, the report commented: “Much of the 1.2 million net immigration appears to have been wiped out by disease, snakebite, exhaustion and malnutrition, for the Indian population of Malaya numbered only 858,614 of which 62.1 per cent was locally born.” The bland matter of fact language cannot begin to disguise the tragedy and horror which lurks behind these raw statistics. Nor does this brief summation of the premature deaths of hundreds of thousands of Indians begin to evaluate the appalling human toll that was exacted in the development of a prosperous colonial economy that enriched many investors and contributed significantly to the wealth of Great Britain. There is no official monument to the nameless Indians who laid the economic and infrastructural foundation upon which the emerging modern Malaysian economy was constructed, but working class Indians will inform you that their legacy is to be found in the railway sleepers and rubber trees of Malaysia; each representing the sacrifice of an Indian life.

Although at that point my energies were directed towards the completion of a doctoral dissertation on the Hindu festival of Thaipusam in Malaysia, my research continued to generate a considerable volume of historical material which I felt cast fresh light on the Indian experience in Malaya/Malaysia. During the fieldwork for my doctorate, I interviewed members of a vanishing generation of Indian Malaysians; people who had been recruited under the kangany system; who had personal experience of the Klang strikes of 1941; who had participated in the wartime politics of Indian nationalism; who had been active in the early years of the Malayan Indian Congress; and who had known the leading figures who had helped shape contemporary Indian society in Malaysia.

PORTUGUESE COLONIALISM

The power of the Melaka Sultanate, and ultimately that of the entire Malay Archipelago, was to be challenged and subsequently broken by the arrival of European colonial powers. Portugal was the first European power to establish a colony on the Malay Peninsula. The Portuguese, like later Europeans, were aware that the Strait of Melaka was an essential sea route for the conduct of east-west trade, especially that between China, the Malay Archipelago and Europe. They also knew that that the wealthy and flourishing state was the hub of a vast trading network and that, among other things, it was the principal emporium of the spices (nutmeg, cloves and cinnamon) which were in such high demand in Europe. The capture of Melaka would wrest this commerce from Muslim control, in the process undermining the trading economies of Cairo and Mecca. Moreover, it would force Venetian merchants to purchase their spices from Portugal at prices determined by the Portuguese.

In 1509, a Portuguese fleet, consisting of four or five ships, and commanded by Diego Lopes de Sequiera, arrived in Melaka. De Sequiera attempted to strike a trading agreement with the Melaka Court, but met with Malay opposition, largely inspired by Arab and Indian Muslim traders who were aware of the reputation of the Catholic Portuguese as “fanatical” enemies of Islam. A botched Melaka attack failed to destroy the Portuguese expedition, and although several of de Sequiera's men were captured, the main body of his force successfully put to sea.

Having failed to negotiate their way into Melaka, the Portuguese now resorted to military measures. A Portuguese invasion force, consisting of eighteen ships and 1,200 men, including Malabar Muslim auxiliaries, and commanded by Alfonso de Albuquerque, returned to Melaka in 1511. Albuquerque's key objectives were the destruction of the Melaka Sultanate both as a major Malay trading power and as a celebrated centre for the study and diffusion of Islam. Albuquerque faced a Melaka that was rent by internal divisions; between Sultan Mahmud and his son, and between merchants who remained loyal to the Sultan and those who supported the Portuguese. Fighting continued for several months before the Portuguese could finally claim victory.

Dato Seri Abdullah Ahmad Badawi succeeded Dr Mahathir as Prime Minister on 31 October 2003, having served as his loyal Deputy in the period which followed the sacking of Anwar Ibrahim. Abdullah was a wellcredentialed Islamic scholar who brought a mild and mannered approach to the conduct of public affairs. Initially Abdullah won wide support. He discarded some of Mahathir's more extravagant projects, offered no opposition to the Supreme Court ruling which quashed Anwar's sodomy conviction, and abandoned Mahathir's plans for a population of seventy million. He enunciated plans for tackling poverty and reinvigorating agriculture and rural development. His liberal approach foreshadowed greater freedom of expression. Following several high-profile arrests for corruption, Abdullah promised to curb abuses of power and to reform a police force notorious for its corruption and brutality. He introduced a programme of Islam Hadhari (Civilizational Islam), which appeared to be tolerant and moderate and which he proclaimed as the guiding lodestar of his administration. Asking Malaysians to “work with me, not for me”, Abdullah won a sweeping election victory on 21 March 2004 with BN claiming 199 of 219 seats. Abdullah was aided by an astonishingly inept campaign by PAS which openly supported Osama Bin Laden and Afghanistan's Taliban.

The 2004 election marked the apogee of Abdullah's leadership. Early in the second term the seeming reformist zeal which had led to his electoral triumph petered out and was replaced with hesitancy and indecision. Muhammad Takiyuddin Ismail and Ahmad Fauzi Abdul Hamid contend that from the very outset Abdullah faced near impossible obstacles. He lacked an established power base within UMNO and many of his Malay Cabinet colleagues were hard-line Malay nationalists. He was unable to develop patronage networks or deliver economic rewards to supporters within the party, and key reforms were opposed by influential elements within UMNO and the police. Abdullah was accused of protecting the business interests of his son, Kamaluddin, and son-in-law Khairy Jamaluddin, and of shrouding government decisions, especially the awarding of contracts, cumulatively worth billions of dollars, in secrecy. Moreover, Abdullah's Islam Hadhari did not translate to moderation at the grass-roots level, and he appeared to be both incapable and unwilling to impose any curbs on the more obvious excesses of Islamic bureaucrats.

The large-scale migration of Indians to Malaya throughout the nineteenth century and the first four decades of the twentieth century led to the creation of a distinct Indian Malaysian society. This community remains divided horizontally between the minority upper classes — the middle, professional and business classes — and a large working class which constitutes over eighty per cent of the population. The schism between the classes — upper and lower — within the community can be generally traced to the differing circumstances of their migration to Malaysia. Thus the descendants of “labour” recruitment — those who were contracted under indenture, kangany, or assisted-labour schemes to work in the plantations and within government utilities — now makes up an underclass which continues to fill labouring and unskilled occupations within modern Malaysia. The middle and upper classes have their origins in “non-labour” migratory streams; that is, their forbears were those Indians who were appointed to clerical and technical positions in colonial Malaya, or who established themselves in professions and businesses. The social gulf between the classes remains an obvious feature of Indian society, and many “non-labour” Indians endeavour to maintain their social distance from “labour” Indians, and in extreme cases many even deny all bonds of common ethnicity.

S. Arasaratnam has argued that the shared experiences of workingclass Indians from the time of indenture and kangany recruitment have coalesced into a “plantation-oriented culture” characterized by stasis and underachievement, representing the world view of a neglected and marginalized underclass. It is a culture which is marked by meagre educational attainment, low income, a marked absence of inter-generational vocational and economic mobility, and is plagued by a range of social problems. Moreover this culture has developed its own paradigmatic impulses, which unless broken, threaten to lock Indian labouring classes into a permanent underclass.

The plantation culture had its genesis in the early milieu of Indian labour migration. Workers recruited under both indenture and kangany auspices were subject to repressive regulation, constant invigilation, and harsh discipline. Both systems bore a striking resemblance to slavery in that they established complete legal domination over the labourer and treated him/her as a mere (and dispensable) component in the process of production.

For countless centuries the Malay Peninsula was a major locus for maritime trade conducted between West and East Asia. The Peninsula was strategically situated at the crossroads of the principal South and East Asian maritime routes, lying between two major subcontinents (India and China) and two great oceans (Indian and Pacific). The international trade route between China and India and thence to West Asia and Europe passed through the Strait of Melaka, and the Riau-Lingga Archipelago (south of contemporary Singapore), regarded as the only known safe route between East and West Asia. The centrality of the Malay Peninsula was underscored by the seasonal pattern of the monsoons. While between January and April the northwest monsoons were favourable to traders from China, between July and November the prevailing southwest monsoons brought traders from the Indian subcontinent. The pivotal location of the Strait of Melaka led to the early establishment of trading entrepôts on the Malay Peninsula and in Sumatra. Trade networks reached as far as the African coast, Arabia, and the Persian Gulf and thence to Europe.

Trade between India and the Malay Peninsula dates back to prehistoric times. Verifiable sources indicate that there were systematic exchanges between India, Southeast Asia, and China in the first millennium EFH, and that throughout this period, India and Southeast Asia became important trading partners. However, the earliest documented Indian links can be traced to the period of the great Indian Emperor Ashoka (circa 268– 233 EFH). Later Indian traders and adventurers visited the Peninsula in search of gold. Indeed contemporary Indian sources, both Hindu texts and Buddhist Jatakas, refer to the Malay Peninsula as the Golden Khersonese or “land of gold” (in Sanskrit, Suvarnabhumi).

The increasing volume of Indian maritime trade with Southeast Asia in the closing centuries EFH had a powerful impact on indigenous political and social structures. The consequent Indianization of Southeast Asia was to reshape and leave a permanent imprint upon local cultures, societies, languages and religious beliefs.

Early Indian trade within the Malay Peninsula and Sumatra was conducted through local chieftains and chieftaincies. Most scholars accept that the processes of Indianization commenced in the earliest years FH, and became more pronounced following the rise of the Gupta dynasty.

In the last three decades, international donors have promoted Irrigation Management Transfer (IMT) in many developing countries as a remedy for solving management problems in government-run irrigation systems. The main argument of this book is twofold. First, IMT's potential to address these problems cannot be achieved if the overseeing irrigation agency does not embrace the need for management transfer. Second, IMT's success cannot be measured without linking local outcomes to the agency's willingness to relinquish its power with the transfer and how it formulates and implements IMT policy.

This book brings to light the close linkage between IMT and the issue of bureaucratic reform. New challenges in water resources management require not only well-formulated reform programmes, but also bureaucracies that value these programmes and are committed to their implementation. Most reform efforts neglect to account for the interests and needs of the bureaucracies that, in essence, are being asked to reform themselves. Taking Indonesia as my main case, I highlight that, if proposed reform is to be meaningful in practice, current authorities must believe in its need; or at least be willing to move forward with the reform. This book analyses the political processes that shape IMT policy formulation and implementation in Indonesia from August 2003 to July 2005, and illustrates how the irrigation agency contested the idea of management transfer vis-à-vis its prominent interests and role in the sector's development.

IMT embodies the aspiration of the international epistemic community to transfer the management of government irrigation systems to farmer organizations — in Indonesia, the Federation of Water User Associations (FWUAs) and the Water Users Associations (WUAs) — as such transfers are regarded as crucial in addressing the problem of poor system performance. International donors and policy-makers viewed the irrigation agency as inefficient in conducting the overall system management and conceded that farmer participation might contribute to increased project effectiveness; therefore, they urged the need for management transfer. This idea of farmer participation is derived from successful experiences in farmer-managed irrigation systems (FMIS). The inclusion of this idea in the policy agenda of the international donors was based on the common perception that government irrigation systems had grown faster than the institutions that had to regulate them and was generated by mounting criticisms concerned about the deterioration of “common property resources” and the impoverishment of the rural community due to government policy interventions.

INTRODUCTION

The Indonesian state continues to function as a rentier state, even after the fall of Suharto's New Order government in 1998. A rentier state is defined as one in which rents are paid by foreign actors directly to the state and its leaders, and where society is only involved in the utilization of the profits. The characteristic of Indonesia as a rentier state is evident from both the massive use of the project approach (which originated in the late 1960s) in Indonesia's sectoral development and the government's dependency on foreign loans. The political reform following the fall of Suharto's dictatorship did not eliminate rent-seeking practices. Instead, these practices remain rooted in the political relationship between the president in power and the country's ministers, and continue to govern the process of state (re)formation. This dependency on foreign funding remains apparent in the present Indonesian government.

This chapter discusses the characteristics of the Indonesian state as a rentier state (Section I) and illuminates the current political relationship between the president and the ministers (Section II). It also analyses how the concept of regional autonomy failed to change the central government–regional government relationship: at the national level, the central government has resisted the application of regional autonomy and at the regional level, regional autonomy has been hampered by widespread corruption practices inside and outside the government (Section III). The chapter then explains the formal changes incorporated in the emergence of regional autonomy and its effect on the organizational restructuring of the irrigation agency at the regional level in 2001 (Section IV). This chapter also details Indonesia's sectoral development, shaped by that project approach of the late 1960s, and how the adaptation of government organizational structures and financial regulations since the 1960s have had a profound and lasting effect on the development of the state irrigation agency (Section V).

SECTION I: INDONESIA AS A RENTIER STATE

The present discourse on the characteristics of the Indonesian state after the fall of the New Order government is shaped by two dominant propositions. Following the political reform of 1998, some of Indonesia's political observers consider that the state has entered a transitional phase — from authoritarian rule to a new democratic system of government — in which civil society will play a more prominent role.