Indonesia is now the fourth largest country in the world, but many aspects of its economic history remain poorly understood. This book is the first comprehensive survey of Indonesian economic history in the 19th and 20th centuries, examining both the Dutch colonial era, and the post-independence period. Extensive use is made of recent work by Dutch, Indonesian and Australian scholars to develop a number of key themes relating to economic growth and structural transformation of the Indonesian economy from the early 19th century to the present.

Based on new datasets, this book presents an economic history of Indonesia. It analyses the causes of stagnation of growth during the colonial and independence period, making use of new theoretical insights from institutional economics and new growth theory. The book looks at the major themes of Indonesian history: colonial exploitation and the successes and limitations of the post 1900 welfare policies, the price of instability after 1945, and the economic miracle after 1967. The book not only discusses economic change and development – or the lack thereof – but also the institutional and socio-political structures that were behind these changes. It also presents a lot of new data on the changing welfare of the Indonesian population, on income distribution, and on the functioning of markets for rice, credit and labour. Concluding with a discussion on whether the poor profited from the economic changes, this book is a useful contribution to Southeast Asian Studies and International Economics.

History matters. At the beginning of a new century and amidst the turmoil of a new democracy, a historical perspective on modern Indonesia is needed more than ever. This innovative economic history connects back to the colonial era and helps to explain why the transition from colonialism to Independence and from the New Order to democracy has been so difficult and sometimes traumatic. The Emergence of a National Economy identitifies three grand themes in this transformation: globalisation, state formation and economic integration. Globalisation affected the Indonesian archipelago even before the arrival of the Dutch—the New Order experience was only the most recent wave. Modern state formation began in Java under Governor-General Daendels (1808-11) and culminated in the centralised, military-bureaucratic state of Soeharto's New Order (1966-98). A national economy emerged gradually from the 1930s as the Outer Islands were reoriented towards an industrialising Java. These three themes link chronological chapters from the pre 1800 period through the modern colonial era to the breakdown of the colonial system after 1930, the birth of modern Indonesia, the remarkable economic transformation under the New Order, and the 'meltdown' during the Asian crisis of 1997/98. This overarching story gives a unity and rythm to Indonesia's modern history, while helping to explain why the future is likely to be different. The four authors—senior scholars from Australia (Howard Dick), Germany (Vincent Houben), the Netherlands (Thomas Lindblad) and Indonesia (Thee Kian Wie)—draw on a very wide range of sources to combine the insights of history, economic history and economics.