What’s the premier academic journal on the Indonesian economy? The answer is going to upset nationalists, but according to the authors of a biography on 'the grand old man of Asian economics' it’s an Australian publication.

The Bulletin of Indonesian Economic Studies remains the pre-eminent source of accurate and unbiased information on the financial health of this country.

If survival is a measure of success, and in the corrosive world of university writing any slip in credibility and peer respect means an end to publishing, then the BIES deserves the accolades.

The journal was started in 1965 against significant opposition and indifference. That it began was due almost entirely to the belief of one academic in the importance of Indonesia as a proper subject for serious research by scholars in the nation next door.

That man was Heinz Wolfgang Arndt who died in a car smash in Canberra five years ago aged 87 and still working. He had just completed another visit to this country, proof that his interest in Indonesia went far beyond crushing numbers on fiscal follies.

He loved the archipelago and its people despite hostility from some rabid xenophobes. In 1964 Arndt was invited to deliver a lecture at the Hasanuddin University in Makassar, but the introduction by the rector Arnold Mohonutu was far from friendly.

In a 40-minute harangue the rector claimed the West was 'out to crush Indonesia by bringing about her economic collapse', arguing that all foreign aid was motivated by imperialist designs … and reminding Australians that they were 'stooges of the British' outnumbered ten to one by Indonesians and their powerful army.

With that sort of welcome, most Australians would have said Up You! and caught the next plane home. But Arndt had endured greater insults to the lasting shame of the British.

For Arndt was originally a German scholar with a Jewish background who had fled to Britain to escape the Nazis in 1933. At the time eminent academics in the UK were encouraging their colleagues to move to the West.

He studied at Oxford, embraced British values and wanted to change his citizenship. But after the war began Arndt was arrested as an enemy alien, shipped to Canada and treated despicably before his status was revised and he was allowed to return to the London School of Economics.

It seems we never learn; how many people today are being demonized by the West, not because of their personal views, behavior or character, but because they were born elsewhere and follow a different religion?

Spending eight months in detention (where he started a camp university) and being labeled a 'communist trouble-maker' tempered but didn't destroy his pro-British sentiments, say the authors of Arndt's Story. He was naturalized in 1946 and quit Europe to teach economics at Sydney University.

In post-war Australia academic inquiry wasn't highly regarded by the general public. Arndt wrote that 'ignorance and apathy' seemed widespread. So he set out to become a left-leaning public intellectual and was soon involved in major economic debates, including reconstruction, immigration and inflation.

In 1949 he was offered a job in Yogyakarta as an economic adviser but couldn't accept for personal reasons. Instead he moved to University College Canberra as professor of economics.

His spell as a Fulbright scholar in the US seems to have been a generally unproductive and frustrating time because of low academic standards and racism which he detested. He later spent time in India as a visiting professor where he became interested in the economics of developing nations. But he didn't like India.

His trips to the sub-continent included stops in Southeast Asian capitals where he found Indonesia particularly enticing. Back in Australia as chair of a new research school at the Australian National University (ANU) he proposed making Indonesia a major project.

‘Almost everyone he consulted advised against the effort,’ the authors of Arndt's Story recalled. ‘Soekarno's 'Guided Democracy' was in full flower and the Indonesian economy was in tatters. Moreover, Indonesia was in its state of confrontation – Konfrontasi – with Malaysia.’ There was also doubt that Indonesia would cooperate or even let Australian researchers into the Republic.

Arndt’s letters home during a trip to Indonesia in 1964 reveal ‘ idealism, optimism and great enthusiasm, but not zealotry or gullibility. His eyes were fresh, he went without preconceptions.’ If only more Australians could follow his example.

He also discovered inflation at 600 per cent, massive corruption, manufacturing running at less than 20 per cent of capacity and foreign trade frustrated by a mass of regulations.

Publication of the national budget and supporting statistics was banned. At a meeting of economists one dared to question a minister. The reply showed the tenor of the times: 'The fact that you think economic problems important shows how your mind has been corrupted by Western liberalism.'

Change 'economic' to 'security' or 'terrorism' and you can encounter similar responses today.

Arndt pushed on, even when the 1965 coup made the chaos even more chaotic. (Curiously this book claims ‘at least 100,000’ died in the post-coup anti-Communist purge when most authorities estimate five times that number.)

But once Soeharto had consolidated his position and announced that economic development must take priority, guided by experts and not the military, Arndt and his team of young scholars had already established valuable contacts with their Indonesian counterparts. They were able to get information denied to others, including the public, for publication outside Indonesia.

From then on Arndt was a regular visitor to the archipelago gathering data and providing independent analyses. Indonesian economists were invited to Australia and a great bond was built between the intellectuals of the two nations.

The role of the so-called Berkeley Mafia – the University of Indonesia’s US-trained economists – is widely known in the story of Soeharto’s New Order government. The influence of the Australians under Arndt has not been well recognized till now.

The authors claim that Arndt's staff and students "constituted the best repository of intellectual capital on the Indonesian economy that any institution could boast."

Not all were impressed with Arndt taking the role of ‘a prominent defender of the (Soeharto) regime, but by no means an uncritical one’. Some Australian academics and church groups thought Arndt’s work reactionary, ‘symptomatic of the intellectual and moral decadence of the Australian bourgeoisie’, even part of a CIA-inspired plot.

Apart from opening up this little-known recent history, the biography shows just how much can be achieved by one person in the seemingly almost impossible task of getting Indonesians and Australians to understand one another.

Clearly Arndt coupled his determination with charm, diplomacy and a powerfully inquiring mind that seems never to have been corrupted by Western arrogance – another lesson for expats. It's easy to see why he would have been liked in this country where resilience and genuine interest in the culture is so admired

Without Arndt's enthusiasm for Indonesia the West would know a lot less about this extraordinary land and be poorer as a result. Where others saw only an economic basket case unworthy of their talents, this idealistic and brilliant scholar knew how important it was for Australia to engage with Asia and stop seeing itself as a European state. He was way ahead of his time.

Arndt's Story
By Peter Coleman, Selwyn Cornish and Peter Drake
Published by Asia Pacific Press (Australian National University)
Published 2007
Pages: 338

(First published in the Sunday Post 16 Dec 07)
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