Consultants in the Indonesian state: Modes of influence and institutional implications

New Political Economy

Volumn 11, Issue 2, 2006, Pages 251-270

  Hamilton Hart, Natasha ^a  

^a NATIONAL UNIVERSITY OF SINGAPORE   (Singapore)

Author keywords

[No Author keywords available]

Indexed keywords

INSTITUTIONAL FRAMEWORK; POLITICAL ECONOMY;

ASIA; EURASIA; INDONESIA; SOUTHEAST ASIA;

EID: 33748421530     PISSN: 13563467     EISSN: 14699923     Source Type: Journal    
DOI: 10.1080/13563460600655631     Document Type: Article

References (91)

1. Ian Taylor, 'Hegemony, Neoliberal "Good Governance" and the International Monetary Fund: A Gramscian Perspective', in Morten Bøås & Desmond McNeill (eds), Global Institutions and Development: Framing the World? (Routledge, 2004), pp. 124-36.
2. Leslie Sklair, The Transnational Capitalist Class (Blackwell, 2001), p. 139.
3. Timothy J. Sinclair, The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness (Cornell University Press, 2005), pp. 5-15.
4. Richard Robison & Vedi Hadiz, Reorganising Power in Indonesia: The Politics of Oligarchy in an Age of Markets (Routledge, 2004), p. 13.
5. Carlos Maria Correa, The Use and Promotion of Consultancy Joint Ventures by Public Enterprises in Latin America (International Center for Public Enterprises in Developing Countries, 1985), pp. 28-9.
6. Colin Adams, 'Consulting in the Developing World', in Barry Curnow & Jonathan Reuvid (eds), The International Guide to Management Consultancy: The Evolution, Practice and Structure of Management Consultancy Worldwide, second edition (Kogan Page, 2003), pp. 359-66.
7. Frederick Kaijage, 'Introduction', in Frederick Kaijage (ed.), Management Consulting in Africa: Utilizing Local Expertise (Kumarian Press, 1993), pp. 1-20;
8. Asian Productivity Organization, Consulting Skills in Asian Context: A Report of APO Symposium on Consulting Skills (APO, 1992).
9. ISOD (International Society for Organization Development), Report on a Survey into the Use of Consultants in Malaysia (ISOD, 1977), p. 5.
10. Li Yong, 'PR China', in Curnow & Reuvid (eds), The International Guide to Management Consultancy, p. 475.
11. Robert Wade, 'The US Role in the Long Asian Crisis of 1990-2000', in Arvid John Lukauskas & Francisco Rivera-Batiz (eds), The Political Economy of the East Asian Crisis and its Aftermath: Tigers in Distress (Edward Elgar, 2001), pp. 195-226;
12. Robert Wade, 'Making the World Development Report 2000: Attacking Poverty', World Development, Vol. 29, No. 8 (2001), pp. 1435-41.
13. The terms 'donor' and 'aid organisation' are used to refer to development assistance and intergovernmental finance organisations. This is in line with common practice, but funds allocated by these organisations are frequently loans, not grants. Most of the World Bank's programme in Indonesia is made up of loans. From 1999-2004, the World Bank disbursed $5.1 billion to Indonesia, but Indonesia paid more than twice this amount to the World Bank: The net transfer was $5.8 billion in the World Bank's favour. See World Bank, 'East Asia and Pacific: World Bank Commitments, Disbursements, and Net Transfers, Fiscal Year 1999-2004', in Annual Report 2004 (World Bank, 2004).
14. ActionAid, 'Real Aid: An Agenda for Making Aid Work' (ActionAid, 2005), http://www.actionaid.org.uk/100113/real_aid.html.
15. This counts only lending under the headings of Economic Management, Public Sector Governance and Rule of Law. See World Bank, Annual Report 2004, p. 103.
16. Peter Griffiths, The Economist's Tale: A Consultant Encounters Hunger and the World Bank (Zed Books, 2003);
17. Martin Godfrey, Chan Sophal, Tshiyasu Kato, Long Vou Piseth, Pan Dorina, Tep Saravy, Tia Savora & So Sovannarith, 'Technical Assistance and Capacity Development in an Aid-Dependent Economy: The Experience of Cambodia', World Development, Vol. 30, No. 3 (2002), pp. 355-73;
18. James Ferguson, The Anti-Politics Machine: 'Development', Depoliticization, and Bureaucratic Power in Lesotho (University of Minnesota Press, 1994);
19. David Cole & Betty Slade, Building A Modern Financial System: The Indonesian Experience (Cambridge University Press, 1996).
20. Lorraine Carlos Salazar, States, Market Reforms, and Rents: The Political Economy of Telecommunications Reform in Malaysia and the Philippines, unpublished PhD dissertation, Australian National University, 2004.
21. Benjamin Higgins, Indonesia's Economic Stabilization and Development (Institute of Pacific Relations, 1957).
22. Edward Mason, The Harvard Institute for International Development and Its Antecedents (Harvard Institute for International Development, 1986).
23. The total value of such contracts rose from $771 million in 1993 to $2.55 billion in 1995. See Ruben Berrios, Contracting for Development: The Role of For-Profit Contractors in U.S. Foreign Development Assistance (Praeger, 2000), pp. 46-7.
24. Emil Salim, 'To Build Tomorrow's Industry Today: Opportunity and Responsibility', speech at the conference Environment and Development: The Future for Consultancy Firms in Asia, Singapore, 14-17 February 1984, pp. 7, 11.
25. Gitte Heij, 'The 1981-83 Indonesian Tax Reform Process: Who Pulled the Strings?', Bulletin of Indonesian Economic Studies, Vol. 37, No. 2 (2001), pp. 233-51.
26. Unless otherwise stated, information on consultants in Indonesia's economic agencies is based on interviews carried out by the author with foreign consultants, local consultants, World Bank staff and government officials in Jakarta in June 1999, February 2003, December 2003 and June 2004.
27. This figure excludes lending for agriculture, environment, regional development, education, health and other social programmes. Compiled from Indonesia: Project Briefs (World Bank, Jakarta, various issues 2000-2003).
28. World Bank, World Bank Approves US$360 Million in Two Loans To Support Indonesia's Reforms, news release No. 256, Washington, DC, 21 December 2004.
29. Gordon Crawford, 'Partnership or Power? Deconstructing the "Partnership for Governance Reform" in Indonesia', Third World Quarterly, Vol. 24, No. 1 (2003), pp. 139-59;
30. Andi Mallarangeng & Peter van Tuijl, 'Partnership for Governance Reform in Indonesia: Breaking New Ground or Dressing-Up in the Emperor's New Clothes?: A Response to a Critical Review', Third World Quarterly, Vol. 25, No. 5 (2004), pp. 919-42.
31. Not all sources agreed as to who funded the McKinsey report, but an official associated with the project affirmed that the ministry had used its own funds. Interview, Ministry of Finance official, June 2004.
32. Robison & Hadiz, Reorganising Power in Indonesia.
33. This is explicit in standard business texts on the consulting industry. See, for example, Milan Kubr, Management Consulting: A Guide to the Profession, fourth edition (International Labour Office, 2002);
34. Curnow & Reuvid (eds), The International Guide to Management Consultancy.
35. Richard Goode, 'Tax Advice to Developing Countries: An Historical Survey', World Development, Vol. 21, No. 1 (1993), pp. 37-53.
36. On the teaching role of multilateral organisations see Martha Finnemore, National Interests in International Society (Cornell University Press, 1996). On the role of knowledge disseminated by such organisations,
37. see Diane Stone (ed.), Banking on Knowledge: The Genesis of the Global Development Network (Routledge, 2000). Neither discusses consultants per se, but the majority of people working in the development industry and bringing its knowledge to governments are in fact consultants.
38. Heij, 'The 1981-83 Indonesian Tax Reform Process'.
39. Salim, 'To Build Tomorrow's Industry Today', p. 1.
40. World Bank, Guidelines: Use of Consultants by World Bank Borrowers and by The World Bank as Executing Agency (World Bank, 1999).
41. In fact, World Bank-funded consultancies are in theory subject to increasingly complex monitoring requirements by both the Bank and government clients. See World Bank, Guidelines, p. 9;
42. World Bank, Consulting Services Manual: A Comprehensive Guide to Selection of Consultants (World Bank, 2002).
43. According to standard works on the subject, productive use of consultants requires organisation and motivation on the client side, as well as active engagement in working with, monitoring and evaluating the consultant. Clients are urged to asses their overall use of consultants and the results they are getting from them. See, for example, Kubr, Management Consulting.
44. Griffiths, The Economist's Tale. Criticism of the leverage of foreign donors abounds.
45. See, for example, Robin Broad, Unequal Alliance: The World Bank, the International Monetary Fund, and the Philippines (University of California Press, 1988);
46. Joseph Stiglitz, Globalization and Its Discontents (W. W. Norton, 1998).
47. This is an extrapolation based on arguments about the structural and standard-setting power of international investors and gatekeepers, and the political content of technical assistance aimed at promoting international standards. See Sinclair, The New Masters of Capital;
48. Christopher May, 'Capacity Building and the (Re)production of Intellectual Property Rights', Third World Quarterly, Vol. 25, No. 5 (2004), pp. 821-37.
49. Jeffrey Winters, Power in Motion: Capital Mobility and the Indonesian State (Cornell University Press, 1996).
50. Indonesia's LOIs can be accessed at the IMF's website, http://www.imf.org.
51. Crawford, 'Partnership or Power?';
52. Mallarangeng and van Tuijl, 'Partnership for Governance Reform'.
53. Growth Through Investment and Trade, 'GIAT Workplan', USAID Contract No. PCE-I-835-98-00016-00, November 2003, pp. 2-4.
54. For example, World Bank, Project Appraisal Document on a Proposed Loan in the Amount of US$17.1 Million to the Republic of Indonesia for a Private Provision of Infrastructure Technical Assistance Loan, Infrastructure Unit, East Asia and Pacific Region, April 2003.
55. The Bank publishes a 'Project Appraisal Document' (previously 'Staff Appraisal Report') for each project, setting out the procedures, performance indicators and projected costs relating to the loan or grant. The Bank has provided templates for the terms of reference, guides to evaluating consultant proposals for particular projects and even a draft letter from the government requesting technical assistance. See World Bank, World Bank Technical Assistance for the Indonesian Privatization Program (World Bank, 1996).
56. As noted by some critical accounts. See, for example, Wade, 'The US Role in the Long Asian Crisis';
57. Taylor, 'Hegemony, Neoliberal "Good Governance" and the International Monetary Fund'.
58. Tony Killick with Ramani Gunatilaka & Ana Marr, Aid and the Political Economy of Policy Change (Routledge, 1998).
59. See, for example, Godfrey et al., 'Technical Assistance and Capacity Development';
60. Thomas Grammig, Technical Knowledge and Development: Observing Aid Projects and Processes (Routledge, 2002).
61. World Bank, World Bank Technical Assistance for the Indonesian Privatization Program, pp. 41-2.
62. World Bank, Project Appraisal Document, pp. 21, 25.
63. Robison & Hadiz, Reorganising Power in Indonesia; Natasha Hamilton-Hart, Asian States, Asian Bankers: Central Banking in Southeast Asia (Cornell University Press, 2002).
64. R. L. Stirrat, 'Cultures of Consultancy', Critique of Anthropology, Vol. 20, No. 1 (2000), p. 41.
65. Robison & Hadiz, Reorganising Power in Indonesia.
66. Cited in Rainer Rohdewohld, Public Administration in Indonesia (Montech, 1995), p. 117.
67. Jeffrey Winters, 'Criminal Debt', in Jonathan Pincus & Jeffrey Winters (eds), Reinventing the World Bank (Cornell University Press, 2002), pp. 126-8.
68. Natasha Hamilton-Hart, 'Anti-corruption Strategies in Indonesia', Bulletin of Indonesian Economic Studies, Vol. 37, No. 1 (2001), pp. 65-82.
69. Kompas, 'Konsultan Menguras Kantung BPPN?' ['Consultants draining the pockets of the National Bank Restructuring Agency?'], 8 July 2001.
70. World Bank, 'Combating Corruption in Indonesia: Enhancing Accountability for Development', East Asia Poverty Reduction and Economic Management Unit, Washington, DC, October 2003.
71. Ibid.
72. World Bank, Project Appraisal Document, p. 105.
73. Godfrey et al., 'Technical Assistance and Capacity Development'.
74. For example, World Bank, Project Appraisal Document, p. 11.
75. This account of McKinsey's role is based on interviews with a ministry official closely associated with the project and a World Bank official (Jakarta, June 2004 and December 2003).
76. Stirrat, 'Cultures of Consultancy', pp. 41-2;
77. John Coates, The International Consultant's Manual: A Guide to Winning Consultancy Assignments Financed by the International Finance Institutions (Aedilis Book Company, 1991).
78. Susan George & Fabrizio Sabelli, Faith and Credit: The World Bank's Secular Empire (Penguin, 1994).
79. Berrios, Contracting for Development, pp. 12-13.
80. Quoted in Winters, 'Criminal Debt', p. 122.
81. Killick et al., Aid and the Political Economy of Policy Change, p. 28.
82. Ferguson, The Anti-Politics Machine.
83. Stirrat, 'Cultures of Consultancy'.
84. Sinclair, The New Masters of Capital.
85. Denis Saint-Martin, Building the New Managerialist State: Consultants and the Politics of Public Sector Reform in Comparative Perspective (Oxford University Press, 2000).
86. Blanca Heredia & Ben Ross Schneider, 'The Political Economy of Administrative Reform in Developing Countries', in Ben Ross Schneider & Blanca Heredia (eds), Reinventing Leviathan: The Politics of Administrative Reform in Developing Countries (North-South Center Press, 2003), pp. 1-29.
87. Jonathan Boston, 'Purchasing Policy Advice: The Limits to Contracting Out', Governance, Vol. 7, No. 1 (1994), pp. 1-30.
88. Hamilton-Hart, 'Anti-corruption Strategies.'
89. Daniel Guttman & Barry Willner, The Shadow Government: The Government's Multi-Billion Dollar Giveaway of its Decision-Making Power to Private Management Consultants, 'Experts', and Think Tanks (Pantheon Books, 1976)
90. Berrios, Contracting for Development.
91. Bertrand Badie, The Imported State: The Westernization of the Political Order (Stanford University Press, 2000).