INTRODUCTION

Quite in contrast to the view that “in a traditional Malay rice-producing village the role of capital and credit in the agricultural economy is very limited”, the close relationship between indebtedness and marketing was already established in the early stage of commercialization of the padi economy. As noted by Sharom Ahmat, the farming out of tax revenues by the Kedah sultanate to Chinese revenue farmers at the turn of the century was the first step in this direction.

By the mid-fifties, four-fifths of all the padi farmers in the Kedah region were reported to have handed over part of their crop to the buyer, who had provided them with credit under the padi kunca arrangement. The padi buyer was usually the village shopkeeper or a shopkeeper in the nearest town, from whom groceries and other consumer items were also obtained on credit. Each shopkeeper would be associated with a miller, from whom he acquired credit to finance the padi kunca deals and similarly, each mill would be financed by one of the large Chinese banks. Thomson mentioned that in one year, one bank alone lent out more than $12 million to mills in the Kedah area. Thomson also estimated that through the system of padi kunca, farmers lost out on half the value of the crop. The pervasive and pernicious character of rural indebtedness, with its interlocking into the marketing system, has become almost legendary.

What were however the characteristics of the peasant economy which made this an endemic feature of peasant life?

Indonesia has a strong commitment to the automotive industry complementation as indicated by the activities of the Association of Automobile Sole Agents and Assemblers (GAAKINDO). The latter convened the ASEAN Automotive Federation (AAF) in 1976. GAAKINDO was subsequently renamed the Automotive Federation of Indonesia or Federasi Otomotif. Members of this federation have explored other problems to upgrade the viability of ASEAN automotive industries, such as through “software complementation” and “strategic planning”. The Indonesian Government has also assisted the private sector in promoting co-operation in the automotive industry in ASEAN and to identify the problems that have emerged and their possible solutions. Although i t is recognized that each country would like to produce its own vehicle, Indonesia has agreed to make use of the components now available in the ASEAN countries instead of importing from the principals in other countries. While Indonesian's aim is to have a national vehicle by 1987 it will still export parts for the complementation and purchase parts from ASEAN members for the other vehicles that are produced in the country.

This section tries to show how decisions have been made in Indonesia for the automotive industry complementation in ASEAN and how its industry has been affected by the decisions.

In Indonesia, the government and the private automotive associations have been the two sectors which make decisons for the automotive complementation. From the start of the complementation project, the government has been the leading sector because of its pervasive role in the Indonesian economy. The government has laid out general policies for the various economic sectors to follow, and in particular, as far as the automotive industry is concerned, the official policy is to start producing the automotive engine in 1983 and to finally produce all the parts for the whole vehicle by 1987. However, it is the automotive parts producers who must attend to the problem of how to phase their business to fit in with the objectives of the government.

The Stage

A live show is generally played on an impromptu stage, usually a wooden platform two and a half to three feet above the ground. The person hiring the show is expected to have this platform ready for the troupe. An assembled stage would consist of a floor of wooden planks held together by nails and ropes, placed on empty oil drums or tree trunks at its four corners. Attached to the front corners of the stage are usually long strong poles for fixing electrical wires for the stage lighting and power for the band, if used. Without walls, the stage becomes an arena only for the musicians and players acting out a scene. Those on cue or due to exit make use of a rough ladder from the ground to the rear end of the stage. In most cases a simple shelter is built behind the stage with canvas or corrugated iron roofing and a few chairs are provided for the actors or performers to use when resting or changing. Stage lighting is basic and serves only to light the stage. Sometimes gas lighting is used instead of the more common electric lighting. The stage has no sets, the only props used being hand props. Audiences usually have to imagine, for example, the shape of doors and chairs which the actors refer to in the comic sketch. The rear of the stage is usually occupied by the troupe's band of musicians comprising a rhythm guitarist, lead guitarist, a drummer, an accordian player or a tambourine player. The front half would be the actors and performers' area during the show.

On state and national occasions and in competitions a proper stage in a hall is used, such as the Dewan Sri Pinang (City Hall) of Georgetown or the Dewan Pelbagai Guna (All- Purpose Hall) at Batu Uban. Even then there are no stage settings or props. On radio and television the genre is slightly altered to conform to certain technical needs.

As an archipelago, Indonesia is dependent upon shipping for much of its internal trade. Just how geographically fragmented the country is can readily be appreciated from the map. Population, however, is not evenly distributed. Two-thirds of the population is concentrated in the small but amazingly fertile islands of Java and Bali. Of the remaining third of the population which is located in the Outer Islands, the large proportion is accounted for by Sumatra. Eastern Indonesia, which encompasses about half the country's total area of land and sea, contains barely 10 per cent of the total population. This distribution of population is reflected in the pattern of interisland trade. Most of the food production and manufacturing is located on Java, and the largest proportion of interisland trade flows between Java and Sumatra.

Because Java is overpopulated relative to its resource base while the Outer Islands are under populated, substantial real income gains could be expected to accrue from interisland specialization and trade. An efficient interisland shipping industry is essential, however, if those gains are to be realized. Any margin of inefficiency in the cost of providing shipping services resembles an interisland tariff over and above the natural level of protection involved in providing transport services at some unavoidable minimum cost. Such inefficiency frustrates economic integration and the economy sacrifices both current and future real income from interisland trade forgone.

In the late colonial period a very efficient and extensive network of interisiand shipping services was provided by a private Dutch company known familiarly as the KPM (Koninklijke Paketvaart Maatschappij or Royal Packet Company). By establishing a firm monopoly of the whole interisland network, apart from a few lines to Singapore, the KPM was able to use profits from the main trunk lines to cross-subsidize regular scheduled services to even the most remote corners of the Archipelago. By through-shipment arrangements, these interisland services were linked with deepsea lines to all parts of the world.

INTRODUCTION

In order to arrive at a deeper understanding of the household economy and the process of differentiation evidently occurring at the village level, more intensive “case studies” were then made of sixteen village households. These sixteen were chosen according to three criteria: that of stratification, that is, according to the household types senang, sedang and susah, identified earlier; that of variability, that is, where possible, with different family structures, and thirdly, the limits of the possible were set by personal access and the availability of a family member willing and able to fill in the questionnaires and answer diverse other questions. These sample households were not chosen by me but by my adoptive father in the village, according to the parameters set above. As such, they may reflect his personal friendships in the village; on the whole, however, they seem to be fairly representative of the village households, and care was taken to include households from both the major political factions in the village.

Data collected on these sample households is of three kinds:

1. biographical

2. income and expenditure data

3. time utilization data

To begin this chapter, an introduction of the various households with the biographies of the household heads, followed by an examination of their budgetary and labour utilization patterns, is in order.

THE LIFE HISTORIES

Senang Households

We shall begin this series of household portraits with the well-to-do households and appropriately then, with Ahmad D, the largest landowner in the village. He owns a total of 12.75 re of padi land, operates altogether 17.5 re and estimates that every padi season nets him a profit of $5000, certainly a not inconsiderable sum. What does a well-to-do man do with his money?

In 1968, he made his first major investment with the construction of a house which would cost at current prices at least $15,000. In 1970 he bought a pedestrian tractor in partnership with his brother.

INTRODUCTION

Most studies of the Green Revolution conceive of it as the vehicle with which a pre-capitalist peasantry is brought into the fold of a market economy. The following comment is typical:

The nature of this traditional peasantry as evocated in statements like “padi planting is therefore never a business proposition. It is a way of life”, is widespread as conventional wisdom not merely in political discourse but also in the academic literature. A geographer's description of the North Kedah Plain in 1951 made repeated reference to the “self-contained subsistence farmers who plant a few coconuts around their huts to supplement their rice and set traps in the glam swamp for edible fish.” Further in the text, he adds: “Throughout this period (between 1911-47) a close approximation to self-contained subsistence farming based on padi has been the mode of life on the Plain…”

Furthermore,

The system is thus seen to comprise a large mass of small producers with an intact subsistence cycle, surplus for trade being extracted via rents in kind. Alternatively, the marketed surplus is seen to issue from larger farms which produce sufficient quantities to engage in “commercial production”. Thus, in the calculations of the CPR study:

Changes in Industrial Policy

Japanese industrial policy has undergone a major change since the energy crisis in 1973/74. The basic feature of the change is the shift of emphasis from “forward looking” industrial policies to strengthen the international competitiveness of basic industries to the “management-of-market-failure” industrial policies which became necessary with the increase in the number of depressed industries. The former policies tried to set the framework for new, upcoming industries so as to accelerate the introduction of new technologies, the increase in output, and the gain in international competitiveness. The forward-looking industrial policies were designed to contribute to the improvement of the living standard of the people as well as to the acceleration of economic growth.

However, partly because of the enhanced capacity of the private sector to implement their own future industrial development strategies through increased R & D expenditure and overseas investment and partly because of such external developments as the energy crises in the 1970s and the sharp appreciation of the yen in the mid-1980s, the government has been brought under pressure to shift the focus of its industrial policies to the management of declining industries and areas.

Nevertheless, it is important to note that “forward-looking” industrial policies have never been, and probably will never be, abandoned. In fact, forward-looking policies and industrial restructuring policies have always coexisted in post-war Japan. Even before the 1973/74 energy crisis, the restructuring of the coal and textile industries had been important issues for the government, and the promotion of future high-technology industries has also been an important part of the present day government policy. However, the extent of restructuring industries after the energy crisis has been most pervasive, affecting every aspect of social and economic life of the people involved as well as the industries themselves. The main thrust of industrial policies has therefore been directed at industrial restructuring. For analytical purposes, however, it is useful to look into the government policies in the pre- and post-energy crisis periods.