Accounting for Services

Accounting for Services: The Economic Development of the Indonesian Service Sector, ca 1900-2000

Daan Marks
Copyright Date: 2009
Pages: 340
https://www.jstor.org/stable/j.ctt6wp5vf
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  • Book Info
    Accounting for Services
    Book Description:

    The most intriguing question about Indonesia's economic development during the twentieth century is why the country's growth performance has been so erratic and displayed such a high degree of discontinuity. This is connected with the fundamental question about the nature of long-run economic development in Indonesia.

    So far the economic historiography of Indonesia has been less systematic than what the available source material would permit. Indonesia is exceptionally well endowed with rich statistical sources, which carry the potential of supporting a rigorous and systematic quantitative approach to vital questions concerning the economic growth performance in the long run.

    This book takes such an approach and presents new estimates for the long-run growth of the Indonesian service sector, and analyses the role of the various service sectors in economic development. Linking empirical and theoretical analysis in a creative fashion, Daan Marks provides a rich and original contribution to our understanding of the economic history of Indonesia. He shows that the service sector has played a crucial role in Indonesia's economic development. Or in other words, to fully understand Indonesia's economic development path sevices need to be accounted for.

    eISBN: 978-90-485-2123-4
    Subjects: History, Political Science, Business

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-12)
  3. ACKNOWLEDGEMENTS
    (pp. 13-16)
  4. 1 INTRODUCTION
    (pp. 17-40)

    In the lecture Simon Kuznets delivered in Stockholm when he received the Nobel Prize in Economic Sciences in 1971, he encouraged researchers not to concentrate only on industrial countries but to analyse less developed countries (LDCS) as well.

    ‘For the less developed countries the tasks of economic research are somewhat different: the great need is for a wider supply of tested data, which means essentially data that have been scrutinised in the process of use for economic analysis. […] One may hope, but with limited expectations, that the tasks of refining analysis and measurement in the developed countries will not...

  5. 2 NATIONAL ACCOUNTING FOR SERVICES IN INDONESIA
    (pp. 41-70)

    This chapter serves precisely the aim that economist and political scientist Joseph Schumpeter is supporting, namely a discussion of the estimation methods used to capture economic activity in the service sector within the system of national accounts. This is a necessary condition for the analysis in the subsequent chapters. This chapter starts with an overview of the history of Indonesian national income estimates, followed by an account of the data sources. After an extensive discussion of the estimation methods, some remarks will be made about the reliability of the estimates.

    Before the Second World War a few tentative estimates of...

  6. 3 THE DEVELOPMENT OF THE INDONESIAN SERVICE SECTOR: A quantitative analysis
    (pp. 71-90)

    Horlings (1995: 35) has argued that ‘historical national accounting is a useful tool formeasuringeconomic growth, but cannot be more than a starting point for theanalysisof economic development process’. Earlier Ole Krantz (1983: 131), a Swedish economist who worked on the Swedish historical national accounts, concluded that ‘processing national accounts data along methodologically proper lines can create new analytical purposes’. In the preceding chapter and the appendices the reconstruction of the Indonesian service sector within the framework of national accounts has been done. Now that we know how the statistics have been compiled, it is time for...

  7. 4 ROADS TO RICHES? Transportation and economic development in Indonesia
    (pp. 91-130)

    The thousands of islands, often separated by vast distances, that comprise the Indonesian archipelago stretch out over approximately 5,000 kilometres from west to east and almost 2,000 kilometres from north to south. The land area of the country, approximately 1.9 million square kilometres, is spread over more than 13,000 islands. Such a geographical setting requires an efficient transportation network for both political and economic reasons.

    From a national accounting perspective, the transportation sector usually shows only small variations over time in the contribution to GDP. Krantz (2000) notes that the needs of transport as expressed in economic terms have been...

  8. 5 INVOLUTION AND GROWTH: The ambiguous role of the trade sector in the economic developmentof Indonesia
    (pp. 131-158)

    A widely held belief in economics is that openness to trade accelerates economic development. Classic economic treatises by luminaries such as Adam Smith and David Ricardo showed early on the potential gains of trading between nations. For elaborations of these theories, Paul Samuelson and Bertil Ohlin were rewarded the Nobel Prize in Economic Sciences in 1970 and 1977 respectively. Nevertheless, strong critics of globalisation continue to exist. Those opponents argue that trade accentuates and deepens poverty, both in rich and in poor countries. Advocates of globalisation, however, claim that trade promotes growth, and in turn growth reduces poverty (Bhagwati and...

  9. 6 UNITY OR DIVERSITY? Market integration through trade and transport
    (pp. 159-182)

    The motto of Indonesia isBhinneka Tunggal Ika, which is Old Javanese and is often loosely translated as ‘Unity in Diversity’. Literally it means ‘(Although) in pieces, yet One’. Whether this slogan can be applied to Indonesia’s economy is debatable. It is clear that in Indonesia the emergence of an integrated national economy has been a slow and on-going evolutionary process. Dick et al. (2002: 10) argue that the structure of a national economy came into being only during the presidency of Suharto. They base this finding mainly on the fact that inter-island trade has only risen significantly since the...

  10. 7 CONCLUSIONS
    (pp. 183-190)

    Economic development in Indonesia during the twentieth century was highly erratic. Periods of unprecedented economic growth alternated with dramatic crises. Exportled expansion in the beginning of the twentieth century was followed by stagnation as a result of the worldwide economic depression. The revival that seemed to occur in the second half of the 1930s did not materialise due to the outbreak of the Second World War and the subsequent struggle for independence. The (at best) modest recovery that took place during the 1950s was swept away by the economic turmoil in the mid-1960s. Finally the New Order government of Suharto...

  11. Appendix 1 NATIONAL ACCOUNTING FOR TRANSPORT AND COMMUNICATIONS
    (pp. 191-258)
  12. Appendix 2 NATIONAL ACCOUNTING FOR TRADE
    (pp. 259-278)
  13. Appendix 3 NATIONAL ACCOUNTING FOR GOVERNMENT SERVICES
    (pp. 279-292)
  14. Appendix 4 NATIONAL ACCOUNTING FOR HOUSING
    (pp. 293-298)
  15. Appendix 5 NATIONAL ACCOUNTING FOR FINANCIAL SERVICES
    (pp. 299-306)
  16. Appendix 6 NATIONAL ACCOUNTING FOR OTHER SERVICES
    (pp. 307-312)
  17. Appendix 7 EMPLOYMENT AND POPULATION
    (pp. 313-320)
  18. REFERENCES
    (pp. 321-334)