Berkeley Mafia

The Berkeley Mafia was term given to a group of U.S.-educated Indonesian economists whose efforts brought Indonesia back from dire economic conditions and the brink of famine in the mid-1960s. They were appointed in the early stages of the 'New Order' administration. [McCawley, Tom. [http://www.atimes.com/atimes/Southeast_Asia/JA28Ae02.html "Economic upside - and downside."] "Asia Times" Online. 28 January 2008.] Almost three decades of economic growth followed. Their efforts also began long-term U.S.-Indonesian strategic cooperation, which was important during the Cold War. The Indonesian Book titled "Mafia Berkeley" taught Budiono and Dorojatun Kuntcorojakti (both of them are Indonesian) as the men this term references.

Origins of the group

In the mid-1950s, the economists who would become the Berkeley Mafia were students at the Faculty of Economics at the University of Indonesia (FEUI). The faculty was headed by Sumitro Djojohadikusumo, an economist who had served as Minister of Trade and Industry and Minister of Finance for the Government. Sumitro, being the only teacher with an economics doctorate had to turn to foreign lecturers from Netherlands and lecturers from other faculties to assist in educating the students at FEUI.http://www.fordfound.org/elibrary/documents/5002/057.cfm#5002-div2-d0e2149]

As tensions grew between Indonesia and the Dutch Government over West Irian (now known as West Papua), the Dutch lecturers began to leave the country. Sumitro turned to the Ford Foundation for assistance. The Ford Foundation then began a process where students from the FEUI were chosen to undertake overseas studies at the University of California, Berkeley. After the Ford Foundation conducted some preliminary preparations, the overseas-studies program began in 1957. By the early 1960s, all of the students who had been sent abroad had returned from Berkeley and had begun taking up positions as lecturers at the Army Staff and Command College (SESKOAD).harv|Elson|2001|p=149]

Association with the New Order

In 1966, General Suharto took over executive control in Indonesia from President Sukarno by virtue of Supersemar. Although he would not become President for another two years, Suharto began laying down the foundations for what would become the New Order regime. In late August 1966, Suharto held a seminar at SESKOAD to discuss political and economic matters and the way in which the New Order will approach these problems. The FEUI economists, headed by Widjojo Nitisastro attended the seminar.

During the seminar, the economists presented their ideas and policy recommendations. The presentation impressed Suharto who immediately began setting them to work as a Team of Experts in the Field of Economics and Finance. [cite book |last= Dick |first= Howard |coauthors= et al. |title= The Emergence of a National Economy: An Economic History of Indonesia 1800-2000 |origyear= 2002 |publisher= Allen and Unwin |location= Crow's Nest, NSW, Australia |pages= p.196] On 3 October 1966, with their advise, Suharto announced a program to stabilise and rehabillitate the Indonesian economy. The effect was immediate as inflation left over from the Sukarno Presidency was drastically reduced from a peak of 650% in 1966 to 13% in 1969. [ [http://www.soehartocenter.com/opini/kesaksian/emil_salim.shtml Emil Salim: Pak Harto Selamatkan Bangsa dari Kehancuran | Soeharto Media Center - Soeharto Review ] ] The plan also began putting emphasis on infrastructure rehabillitation as well as developments in the field of agriculture. When Suharto finally became President in 1968, the Berkeley Mafia was rewarded by being given positions as Ministers in Suharto's Cabinet. From their positions, the Berkeley Mafia were able to influence economic policy and guide Indonesia to unprecedented economic growth.

The Berkeley Mafia's liberal approach towards economics were not looked upon favorably by all. Within the New Order, they encountered opposition from Generals such as Ali Murtopo, Ibnu Sutowo and Ali Sadikin whose economic approaches were more nationalistic in nature. [harv|Elson|2001|p=217] With the beginning of the oil boom in the mid-70's, Suharto became inclined to throw his weight behind the economic nationalists and as a result, the Berkeley Mafia's powers were decreased.

Suharto would turn to the Berkeley Mafia again in the mid-1980s when the price of oil began to drop and with it, Indonesia's economic growth. The Berkeley Mafia presided over the liberalization, deregulation and as result, the new growth of the Indonesian economy. [harv|Elson|2001|p=247] Once again, the Indonesian economy began to grow again and once again, the Berkeley Mafia encountered political opposition. This time their opponents were Sudharmono and Ginanjar Kartasasmita who advocated economic nationalism as well as BJ Habibie who wanted a technology-centred economic development. Just like the previous occasion, Suharto sided with the economic nationalists and the Berkeley Mafia's power weakened. Nevertheless, they somewhat retained their influence by virtue of Widjojo being kept on Government as an Economics Advisor.

=Berkeley Mafia during Reform=

Out of the Berkeley Mafia, only Widjojo continued to influence Government during Reform by becoming Economic Advisors for the Habibie, Wahid, and Megawati Presidencies.

Members

The members of the Berkeley Mafia are:
*Widjojo Nitisastro: Minister of Planning and National Development/Chairman of the National Development Planning Body (BAPPENAS) (1967-1983), Coordinating Minister of Economics, Finance, and Industry (1973-1983), Advisor to BAPPENAS (1983-1998), Economics Advisor to the President (1993-1998), Chairman of the Economics Assistance Team (1999-2001)
*Ali Wardhana: Minister of Finance (1973-1983), Coordinating Minister of Economics, Finance, and Industry (1983-1988)
*JB Sumarlin: Vice Chairman of BAPPENAS (1973-1982), Minister of State Apparatus (1973-1983), Minister of Planning and National Development/Chairman of BAPPENAS (1983-1988), Minister of Finance (1988-1993)
*Subroto: Minister of Manpower, Transmigration, and Cooperatives (1973-1978), Minister of Mines and Energy (1978-1988)
*Emil Salim: Vice Chairman of BAPPENAS (1967-1971), Minister of State Apparatus (1971-1973), Minister of Transportation, Communication, and Tourism (1973-1978), Minister of Development Supervision and Environment (1978-1983), Minister of Population and Environment (1983-1993)

See also

* Chicago Boys - a similar group from Chile
* The Shock Doctrine - a book in which the Berkeley Mafia is compared to the Chicago boys.

Notes and references

*

External links

* [http://web.archive.org/web/20070311232419/http://www.fordfound.org/elibrary/documents/5002/057.cfm "An Evening with the Technocrats."] Ford Foundation. Retrieved from Internet Archive on 11 March 2007.