“A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat; since 1970, per capita intake has risen from less than 2,100 to more than 2,800 calories a day. A shocking one-third of young children are still malnourished--but in 1975, the fraction was more than half.”
- Paul Krugman
If there was a Nobel prize for miracle poverty reduction, I think Suharto would win it together with the title of one of most corrupt leaders in modern history. Let the World Bank tell the story of the century;
“Indonesia’s pro-poor performance from the late 1960s to the mid-1990s was based on a conscious strategy that combined rapid economic growth with investments and policies that ensured the growth would reach the poor. This strategy integrated the macroeconomy with the household economy by lowering the transaction costs of operating in the factor and product markets, which provide links between the two levels of the overall economy. This strategy was designed and implemented by highly skilled economic planners (the “technocrats”) at the urging of President Suharto...
Why President Suharto’s government carried out the pro-poor strategy as aggressively as it did remains a mystery of modern political economy, although a personal concern for the welfare of farmers seems to be at least part of the explanation. This personal engagement may also have inhibited more flexible policies as the economy evolved and matured. Hull (2004) notes the continued tendency of the elite to think of peasants as illiterate, which matched President Suharto’s memories of growing up among peasants in rural Central Java. The president’s determination that civil servants receive rice in kind, as part of their salaries, extended far beyond the early and sensible justification for the program—local rice markets were thin and subject to highly unstable prices. Thus the personal influence of the president clearly played a major role in the evolution of policy, and this role became counterproductive as Indonesian society became more affluent and sophisticated and as the economy became more complex. Both farmers and civil servants were well equipped to deal with new technologies and market fluctuations, without heavy intervention by the state, by the 1990s.”
Related;
Delivering on the Promise of Pro-Poor Growth
Perceived Corruption Got Worse in Countries With World Bank-Supported Reform Programs
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