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Living Standards and the Distribution of Income in Colonial Indonesia: A Review of the Evidence

Published online by Cambridge University Press:  24 August 2009

Anne Booth
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Extract

One of the most widely held views about Indonesia, and especially Java, in the nineteenth century was that such economic growth as occurred did not benefit the mass of the indigenous population, whose living standards almost certainly declined. Many scholars have drawn attention to the evidence that per capita rice production fell after 1880 as proof that living standards were definitely falling in the last two decades of the century, while others have not hesitated to draw the bolder conclusion that living standards declined almost continually after 1800:

One theme stands out most prominently in Javanese society during this time: the theme of involution and reaction…. Despite the promises of the changing colonial policies to further the individual welfare of the Javanese, conspicuously little was done in this regard. Instead the Javanese farmer became gradually more impoverished throughout the whole of the nineteenth century, with a particularly severe drop in living standards in the second half of the liberal period (1885–1900).

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Articles
Information
Journal of Southeast Asian Studies , Volume 19 , Issue 2 , September 1988 , pp. 310 - 334
Copyright
Copyright © The National University of Singapore 1988

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References

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14 This argument was made by Reinsma in his 1955 thesis, and quoted approvingly by Fasseur in the 1986 paper referred to above.

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21 Carey, op. cit., 1979, pp. 83–86. See also van Niel, R., “The Effect of Export Cultivations in 19th Century Java”, Modern Asian Studies XV (1981): 43Google Scholar. For a more extended discussion of the impact of export growth on the domestic economy in the last century of the colonial period see Booth, Anne, “Foreign Trade and Domestic Development in the Colonial Economy”, Paper presented to the conference on Indonesian Economic History in the Dutch Colonial Era,Canberra,ANU,1983Google Scholar; forthcoming in Booth O'Malley and Weidemann (editors), op. cit. Detailed information on the Indonesian balance of payments from 1820 onwards is given in Altes, W. Korthals, Changing Economy in Indonesia, Vol. 7, Table 1Google Scholar.

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26 See e.g. Carey, op. cit., 1979, p. 95.

27 Hasselman, op. cit., Appendix R.

28 This point is dealt with in my forthcoming monograph, Agricultural Development in Indonesia, Table 3.10. In a residency such as Surabaya, where 66 per cent of all operators were cultivating land under rotating communal shares, and usually operating quite small holdings, the effect of including their holdings with those under individual titles was to reduce the Gini coefficient of holdings from 0.537 to 0.411.

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31 Furnivall, op. cit., p. 213.

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33 Polak, J.J., The National Income of the Netherlands Indies, 1921–39 (New York: Institute of Pacific Relations, 1943)Google Scholar, as reprinted in Changing Economy of Indonesia, Vol. 5, Table 16.4.

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44 The data assembled by Polak (op. cit., Table 16.4) show that the real income accruing to indigenous Indonesians in Java grew by about seven per cent between 1929 and 1935, while over the same years population grew by 9.3 per cent.

45 In his study of the impact of the depression on the indigenous economy, van Laanen argues that “the gap between rich and poor, between purchasing agents/money lenders and debtors became irrefutably wider. There is no doubt that in many areas in the archipelago the income distribution became more uneven.” To support this argument, Van Laanen points out that the falling price level meant that those who kept their employment usually experienced an increase in real incomes. See van Laanen, J.T.M., The World Depression (1929–35) and the Indigenous Economy in Netherlands India, Occasional Paper 13 (Townsville: James Cook University, Centre for Southeast Asian Studies, 1982), p. 13Google Scholar.

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