Benteng program

Last updated

Official portrait of Sumitro Djojohadikusumo, c. 1970s, who initiated the Benteng program Soemitro Djojohadikusumo, Menneg Riset - Anggota Kabinet Pembangunan II.jpg
Official portrait of Sumitro Djojohadikusumo, c.1970s, who initiated the Benteng program

The Benteng program, also known as the Benteng policy, was an Indonesian economic policy which consisted of measures to provide pribumi entrepreneurs with import licenses in order to hasten the development of an indigenous business class. The program was initiated by Industry Minister Sumitro Djojohadikusumo in 1950 and lasted up until Prime Minister Djuanda Kartawidjaja abolished it in 1957.

Contents

Background

The 1950s saw increased political pressure to nationalize Dutch private companies that still existed in Indonesia at the conclusion of the Indonesian National Revolution. However, Indonesia still needed significant foreign funding and skills in order to develop the foundation of an economy that can support its population. In February 1950 President Sukarno announced to foreign companies in Indonesia that the recovery of the economy of Indonesia following the revolution requires all available funds, foreign and domestic. In 1953 the Minister of Finance Ong Eng Die stated that the role of foreign companies in the economy of Indonesia needs to be formally clarified in future national development plans.

The program was devised as a means to nurture the role of Indonesian nationals in the economic development while avoiding conflict of interest with foreign companies, especially those from the Netherlands.

Execution

The Benteng program was executed in several steps, with significant changes in each step in terms of economic opportunities and access. Its main program covered imports, as the required funds were the least. Further, the role of Dutch companies were seen to be most significant in this area, especially through large trading companies.

The program started by earmarking the importation of certain goods to pribumi businesses. Requirements for obtaining general import licenses were then changed. In 1950 it was decreed importing trading companies have to have at least 70% of its shares owned by native Indonesians. In May and June 1953, increasing this percentage was considered in debate, which brought up allegations of discrimination against the Tionghoa, resulting in the dissolution of Wilopo's Cabinet.

The program was reviewed in September 1955 by the Burhanuddin Harahap Cabinet and Secretary of Finance Sumitro Djojohadikusumo. Its ethnic-based requirements were scrapped and replaced by downpayment requirements.

The formation of the Karya Cabinet led by Djuanda Kartawidjaja in March and April 1957 signaled the transition to a directed economy under the auspices of Guided Democracy; Benteng program was then officially stopped.

Related Research Articles

<span class="mw-page-title-main">Socialist Party of Indonesia</span> Former political party of Indonesia

The Socialist Party of Indonesia was a political party in Indonesia from 1948 until 1960, when it was banned by President Sukarno.

The Berkeley Mafia was the term given to a group of University of California-trained economists in Indonesia who were given technocratic positions under the Suharto dictatorship during the late 1960s. They were appointed in the early stages of the New Order administration. Their work focused on promoting free-market capitalism in Indonesia and reversing many of the progressive economic reforms that had been introduced by the Sukarno government. The economic system in place under the New Order regime was termed crony capitalism due to the vast corruption within the country throughout this period. The Berkeley Mafia, like the Suharto dictatorship itself, aligned with the United States during the Cold War.

<span class="mw-page-title-main">Legislation on Chinese Indonesians</span> Laws oppressing people of Chinese background

Indonesian law affecting Chinese-Indonesians were conducted through a series of laws, directives, or constitutions enacted by the Government of Indonesia that affected the lives of Chinese Indonesians or Chinese nationals living in Indonesia since the nation's independence. The laws were made against Chinese Indonesians. Most of these laws are revoked following Reformation era under president Abdurrahman Wahid.

<span class="mw-page-title-main">Andalas University</span>

Andalas University is a public research university in Padang, West Sumatra. Andalas is one of the major public institution of higher learning in Indonesia, and the oldest outside the island of Java. The university is known for its excellence in social sciences and medical program, and has produced numerous distinguished alumni in public and private service. In November 2019, Andalas was ranked fourth best Indonesian research university from a nationwide evaluation conducted by the Ministry of Research and Technology.

<span class="mw-page-title-main">Burhanuddin Harahap</span> Indonesian politician and lawyer (1917–1987)

Burhanuddin Harahap was an Indonesian politician and lawyer who served as prime minister of Indonesia from August 1955 until March 1956. He was a member of the Masyumi Party and served as Minister of Defense concurrently with his tenure as prime minister. Afterwards, he took part in the unsuccessful Revolutionary Government of the Republic of Indonesia (PRRI) rebellion in West Sumatra.

<span class="mw-page-title-main">Sjafruddin Prawiranegara</span> Indonesian statesman and economist (1911–1989)

Sjafruddin Prawiranegara was an Indonesian statesman and economist. He served in various roles during his career, including as head of government in the Emergency Government of the Republic of Indonesia, as Minister of Finance in several cabinets, and as the first Governor of Bank Indonesia. Sjafruddin later became the prime minister of the Revolutionary Government of the Republic of Indonesia, a shadow government set up in opposition to the country's central government.

<span class="mw-page-title-main">First Amir Sjarifuddin Cabinet</span>

The First Amir Sjarifuddin Cabinet was the fifth Indonesian cabinet and was in office from 3 July to 11 November 1947.

<span class="mw-page-title-main">Djuanda Kartawidjaja</span> Indonesian politician and technocrat (1911–1963)

Djuanda Kartawidjaja, more commonly referred to mononymously as Djuanda, was an Indonesian politician and technocrat who held various positions during the presidency of Sukarno, most notably as prime minister of Indonesia and a cabinet minister in several cabinets.

<span class="mw-page-title-main">Natsir Cabinet</span> Indonesian first cabinet 1950–1951

The Natsir Cabinet was the first cabinet formed after the dissolution of the United Republic of Indonesia and returned to the Unitary State of the Republic of Indonesia. This cabinet was in charge from 6 September 1950 until 20 March 1951.

<span class="mw-page-title-main">Soekiman Cabinet</span> Indonesian Cabinet 1951–1952

The Soekiman Cabinet, also known as the Soekiman-Soewirjo Cabinet, was an Indonesian cabinet that served from 27 April 1951 until 25 February 1952, when it fell following revelations that it had signed a mutual security agreement with the United States.

<span class="mw-page-title-main">Wilopo Cabinet</span> Cabinet of Indonesian Prime Minister Wilopo (1952-53)

The Wilopo Cabinet, also known as the Wilopo-Prawoto Cabinet, was an Indonesian cabinet that served from 1 April 1952 until 3 June 1953.

<span class="mw-page-title-main">Second Ali Sastroamidjojo Cabinet</span>

The Second Ali Sastroamidjojo Cabinet, also known as the Ali-Roem-Idham Cabinet was an Indonesian cabinet that served from 26 March 1956 until 14 March 1957.

<span class="mw-page-title-main">Djuanda Cabinet</span>

The Djuanda Cabinet, also known as the Working Cabinet, was an Indonesian cabinet that served from 9 April 1957 until 5 July 1959, when it was dissolved by a decree from President Sukarno.

<span class="mw-page-title-main">Second Working Cabinet (Sukarno)</span>

The Second Working Cabinet was an Indonesian cabinet that served from 18 February 1960 until 6 March 1962, when President Sukarno reshuffled it.

<span class="mw-page-title-main">Widjojo Nitisastro</span> Indonesian economist

Prof. Dr. Widjojo Nitisastro was an Indonesian economist, who was known as the main architect of the Indonesian economy during the New Order regime of president Suharto, serving as Minister for National Development (1971–1983) and Coordinating Minister for Economy, Finance and Industry (1973–1983). He was one of Indonesia's best-known and most respected economic policy-makers, both within Indonesia and overseas.

<span class="mw-page-title-main">Sumitro Djojohadikusumo</span> Indonesian statesman and economist (1917–2001)

Sumitro Djojohadikusumo was an Indonesian statesman and one of the country's most influential economists. He held ministerial positions under Presidents Sukarno and Suharto intermittently between 1950 and 1978. During his career in government, Sumitro served as Minister of Industry and Trade, Minister of Finance, and the Minister of Research in five different cabinets. He was also the Dean of the Faculty of Economics at the University of Indonesia.

Hashim Djojohadikusumo is an Indonesian entrepreneur and politician.

<span class="mw-page-title-main">Ali Wardhana</span> Indonesian economist and professor (1928–2015)

Prof. Dr. Ali Wardhana, more colloquially known as Bung Ali, was an Indonesian professor and economist, who served as the third Coordinating Minister for Economics, Finance, Industry, and Development of Indonesia from 1983 until 1988 and the 21st minister of finance of Indonesia from 1968 until 1983. He was one of Indonesia's most senior economic policy-makers during the New Order regime of president Suharto, being a member of the influential Berkeley Mafia, a group of American educated Indonesian economists who shaped the Indonesian economy during the New Order. He was the longest serving Minister of Finance, as well as the fifth longest serving minister in Indonesian history.

<span class="mw-page-title-main">First Working Cabinet</span>

The First Working Cabinet was an Indonesian cabinet that served from 9 July 1959 until 18 February 1960, when President Sukarno reshuffled it.

<span class="mw-page-title-main">Jusuf Wibisono</span> Indonesian politician and economist (1909–1982)

Jusuf Wibisono was an Indonesian politician and economist. A member of the Masyumi Party, he served as Minister of Finance from 1951 until 1952 and again from 1956 until 1957, under the Soekiman and Second Ali Sastroamidjojo cabinets. Originating from Magelang, Wibisono took part in Islamic organizations in the nationalist movement from his school years. He joined Masyumi during the Indonesian National Revolution, and became a leading member within the party despite disagreements with other party leaders such as Mohammad Natsir. In both of his tenures as finance minister, he relaxed the tight budgetary controls of his predecessor, and provided favors to political parties.

References