Overpopulation in Asia

To put down in black and white all the changes, conflicts, privations and issues
involved in rapid industrialization would immediately inform people that not only
an economic but a political, social and religious revolution is in prospect.

K. Davis.

Industrialization, hope and expectation.

When we look for development of industrialization in the D.I. Jogjakarta, first attention is directed to the only big city in this region, viz. Jogjakarta. In this city lived at the end of 1958 14% of the population of the D.I. Jogjakarta. The number of inhabitants at that time was 302,715. The city is an upcountry, indigenous, cultural and administrative sub-centre in Java. It is a city of the pre-industrial type, according to the description which Sjöberg gave about these cities (1955). Jogjakarta has grown without the stimulus of an industrial development. In feudal-agrarian Javanese society the city was the centre of the Sultanate, because the princely court was established there. The city grew around the palace (kraton) of the prince and was therefore the political, religious, educational and administrative centre of the Sultanate. For its existence it depended upon food from without, viz. from the surplus food available in the rural areas of the principality. As agriculture was and still is practised with simple methods, while the methods of food preservation were inefficient, the amount of surplus food was limited, and the growth of the city during the 18th and 19th century went by slow accretion.
In its social organization Jogjakarta shows also the characteristic features which Sjöberg described for pre-industrial cities. He mentioned in his description particularities about class structure and the circumstance that one religion is dominant in this type of cities, while minority groups adhere to their own beliefs. In Jogjakarta Islam is the dominant religion, while Protestants, Roman Catholics and Chinese religious groups are minority groups in the city. In the D.I. Jogjakarta there are 570 mosques. For officials the Muslim and some of the Christian holy-days are holidays.
Other features are a pre-eminence of kinship and firm familial organization. The wish to perpetuate one’s lineage is the reason that sons are highly valued.
In the family the older persons hold considerable power and prestige and all the decisions in and concerning the family are taken by the “family-council”. Occupational-groups often select their new members on the basis of kinship.
Because mass communication is rather limited, the city is fairly isolated from other cities in Java.
Class structure in the population, who belong for the greater part to the same racial group, is still rather rigid. However in the last decennia this has been gradually changing. The most striking component of the population is the elite belonging to the nobility and their descendants. In the feudal period the nobility was active in administrative, cultural and military functions of the court, while in the present time many members of the nobility are active in the field of education, especially in the University, and in the high, leading positions of officials. The middle class composed by persons active in trade, commerce and officials are heterogeneous. Persons active in trade and commerce are largely members of an other ethnic group.
In the nineteenth century the growing possibilities to earn a living in trade and commerce was mainly used by the groups of other Asiatics, Chinese and Arabs. In the present time these groups are pushed aside by Indonesians. The middle class which is active in Government offices showed a rapid increase during the period 1930-1959. at the census in 1930 it appeared that in the city of Jogjakarta 17,722 persons were appointed as officials, while in 1959 the number of officials amounted to 35,525. this means that in 1959 12% of the city’s total population were officials. The urban lower class in the city is composed of labourers, betjakdrivers, servants, street vendors and unemployed persons who were driven from the villages and tried to find some work in the city, but did not yet succeed. Class structure is also expressed in the Javanese language. In this language three strata are distinguished, viz. A low, high and very high stratum. In conversation speech varies according to social status.
The characteristic features in the economical organization of a pre-industrial city, which are mentioned by Sjöberg are the following: absence of industrialism, little fragmentation and specialization in its system of production, and non-standardization of manufacturing goods. This is also found in Jogjakarta.
The sources of power are not inanimate as in the case in modern industrial centres but animate sources (human and animal). This is e.g. Demonstrated in the transportation of passengers in the city. This work is done nearly exclusively by using a tricycle fitted up for this type of transportation. In 1959 nearly 10,000 betjakdrivers were working in this transport in the city.
If we look for industrialization in Jogjakarta we find only small-scale industry and handicraft. At the census of 1930 it appeared that in the region D.I. Jogjakarta out of the 653,633 persons counted who had an occupation 163,397 i.e. 25% worked in small-scale industry. At that time most persons worked in batikworkshops, wood- and bamboo handicraft, and in the preparation of foodstuffs and luxuries. Especially women are working in small-scale industry.
Out of the male persons with an occupation only 8.7%, and of the female persons with an occupation 46.-% were employed in this type of industry at the time of the last census. According to the official statements of the local government concerning the number of labourers in the registered small-scale industrial group this amounted to 24,000 in 1957. The type of industry is still the same as in 1930. Most important is the batik- and weaving-industry with 474 batikworkshops, the preparation of food and luxuries and the wood- and bamboo-handicraft.

Capital- intensive industry in the D.I. Jogjakarta was established in the period before the second world war by European entrepreneurs. In the prewar period capital-intensive industry, which was set up in Indonesia by foreign entrepreneurs, was predominantly aimed at the exploitation of raw materials (oil, tin) and the growing of agricultural products for export-purposes. In the D.I. Jogjakarta 16 sugar estates were established in the prewar period, giving work to 63,000 people at the moment of the census in 1930. these estates and factories disappeared in the period after 1942.
To-day industrialization in the D.I. Jogjakarta as well as in the whole republic is in its early stage of first development. This development of industry in Indonesia takes place under unfavourable circumstances. As it is improbable that improvements in agriculture and transmigration, executed each separately or both in coordination, could be of conclusive importance in solving the population problem in Java, these unfavourable circumstances for the development of industry in Java and the other islands of the Indonesian archipelago are a serious matter, all the more so as, for an attempt towards improvement of the standard of living in Indonesia, industrialization seems indispensable. If in the economical policy of the government industrialization is to aim at a rise of prosperity in the country, then this higher prosperity will in the first place work out in a better food-supply. The significance of industrialization will be the creation of possibilities to put non-agrarian products for sale on the world-market and to buy foodstuffs with the foreign currency obtained, to cover the food shortage at home. In the second place there is the establishment of industries directed towards the rise of agrarian production (artificial manure, agricultural implements). A prosperity, meaning for the time being only a full-value diet for the entire population, will be much benefited by such a type of industry.
The present industry in Java and the other islands is, for the acquisition of foreign currency, of only slight significance. The products which at present Indonesia puts on the world-market, are mainly estate products (rubber, sugar, coffee, tea, palmoil, tobacco) and the people’s agrarian products (copra, rubber, capoc, pepper and nutmeg). It is with these agrarian products, that Indonesian gains for the greater part, viz. 60% its foreign currency (Sie Kwat Soen, 1954). this one-sidedness of the export economy involves some disadvantages:

• The above mentioned products belong to the most fluctuating in the world-market. The enormous price-fluctuations render domestic economy very sensitive, so that the creating of a well-balanced domestic economy is much hampered by this fact.
• The decrease in the production of most of these tropical export commodities entails a decline of the country’s revenue in foreign currency (Swianiewicz).
• The exchange-rate has grown to be unfavourable for Indonesia. The value of raw materials exported by Indonesia has in the last half century gone down with 40% compared with the value of the industrial products imported by Indonesia.

(Sumitro on Dec. 13, 1952 in a memorandum to parliament).

The present Indonesian industry, both small-scale industry and capital-intensive industry, puts few non-agrarian products on the world-market. This industry, which produces mainly goods for home-consumption, is therefore dependent on a home-market that has only little capacity for buying this industry can only have an effect of saving foreign currency. As one source of foreign currency, viz. the proceeds of the estate-products. Did not show a rising tendency in the period 1950-1957, the results of the present industrial activity act only as a drag on this unfavourable development. The present yield of estate-agriculture is hardly sufficient for the investments for the preservation of its production-capacity (Kraal.1957).
The possibilities of purchases for the acquisition of raw materials, auxiliary materials and appliances for industry also wax gradually more unfavourable. The development of industry, which is to put non-agrarian products in the world-market, has not yet proved to be possible out of the state’s own resources. Besides a decline of the amounts becoming available out of the sale of agrarian estate-products for the import of capital goods, there are still many more resistances on the way to development of an industry.

Shortage of capital.

Shortage of capital for new investment. In case of a lack of ready capital with Indonesian entrepreneurs and with the government, at traction of foreign capital would be of great importance. This has not happened very often after the obtainment of in dependency in 1950. the population still saw in the estates of foreign owners tokens of the colonial relationship. In the present day hesitation and serious antipathy are still existent in many Indonesian groups towards foreign investments. Also the government’s policy was such, that few foreign entrepreneurs invested their capital in Indonesia. The foreign Investment Bill of 1958 offered few attractions to foreign entrepreneurs. The unattractive economical perspectives of Indonesia, the difficult conditions for immigration of foreign staff members, insufficient safety and the risk of nationalization appeared to be factors discouraging to foreign capital. Instead of attraction of capital a considerable flight of capital took place out of the country both of European and of Chinese undertakers since 1957, because the possibilities for profitable exploitation continuously dimished.
(Swianiewicz 1958, v.d. Kroeff 1959).
Another road towards the formation of capital, by means of a policy leading to voluntary saving both by the population and by the government, and by way of a rise of taxes to proceed to investment of the thus acquired money in industry, would be preferable to the present financing with foreign loans. However it is to be doubted, if the enormous sums, necessary to be able to generate a permanent development of a rapid industrialization under democratic conditions, could be collected by savings and tax-money. Will these handicaps prove to be surmountable for a democratic government? Or will it be a totalitarian regime with a planned economy of rigid consumer-control, forced labour, enforced savings, that will bring about this revolution after the example of the Sovjet Union?
An industrial revolution in agrarian Java will encroach deeply upon basic social institutions, and the Javanese farmer will not let it pass without offering resistance. In the past years however, the credit granted to industry by the great Indonesian banks was only 1/3 of the sum spent on the financing of (often luxurious) import-goods trade.
The prospects of founding a heavy industry in Indonesia are rather small (van Bemmelen 1950). The basic industries creating favourable conditions for a further industrialization want coke and iron-ore situated at not too great mutual distances and in quantities sufficien6 for exploitation. This is not the case in Indonesia, so that for an important industrial development the necessary raw materials are lacking. Of great riches in the Indonesian soil there is little evidence up till now.

Labour-conditions.

It is not to be wondered at with a similar industrial development in the pre-eminently agrarian society of Indonesia, that her is a lack of Indonesian entrepreneurs.
Capital-intensive industry – until 1950 – was entirely conducted and managed by foreigners, mainly Europeans, so that in 1950 there were very few Indonesians with experience in management of business and industrial enterprise. Also the still prevailing attitude of Javanese nobility towards commerce and industry is that “a gentleman does not sully his hands in trade”. (Higgins, 1954).
The young leaders from the Indonesian upper strata of society like to study, by preference medicine, law, sociology, government administration, military science or technics.
This cultural heritage renders it comprehensible that, with the present industrial development, a lack of entrepreneurial spirit and activity is brought to light. There are also few experts and expert personnel for technical, commercial, financial and organisatorial management (Kivary 1955). this lack of managing personnel was very evident at the expropriation of the 300 Dutch estates, banks, and import-export firms, which were still settled in Indonesia in 1958. for the existent industry there were an insufficient number of specialist workers, so that a further development of capital-intensive industry will inevitably experience the disadvantages of this fact, if the difficulties to enter the country remain so great for top managers and technicians being brought in from abroad. It is difficult to imagine how an industrialization will be quickly introduced without foreign personnel. Man-power able to work in industry in present in an alarming abundance: for instance out of the great number of people, who left their desas, because in agriculture there were never any possibilities for a minimum living, and who therefore went into town to try and find a livelihood as betjakdrivers, street vendors, house-servants, porters, casual labourers and in other marginal employment, which attempt does not always succeed. The disguised unemployment of desa-agriculture is in this way partly transferred to unemployment in town. These large numbers of people mean a great surplus in manpower over against the small demand and, after that, a great waste of native productive potential. The great army of people in search of work and of malcontents means a factor for political unrest and may-be also a strong stimulus for starting a policy of rapid industrialization.
The experience with Indonesian labourers in existing industry was, that the achievement per man/hour was low, so that through this circumstance the production process was much retarded. Labour-productivity in Indonesia is among the lowest in the world, through unproductive methods and a low degree of mechanization (Mc voy 1954).
Insufficient food and non-existent or insufficient training are factors for this low production.
In the pre-war period working on an estate or in a factory was mostly considered by the enlisted men as a means of obtaining extra seasonal profit. Most of them, remaining peasants in their hearts, left work again as soon as this was possible and went back to their desas and their ground. The labour-unions policy, in their attempt at amelioration of the labourers’ living conditions in independent Indonesia, was to make high, sometimes even impossible, demands on the entrepreneurs in the matter of wages, number of working-hours, bonuses, holidays dismissal, and so profitable exploitation of a number of industries was no longer possible. The Indonesian labourers wish to receive – together with the country’s in dependency – a rising standard of living, ample employment and a growing opportunity for the unfolding of everybody’s personality is difficult to combine with the conditions demanded by the building of an industry, for instance smooth labour relations, so that production can go on uninterruptedly. An increasing productivity per man/hour and a high level of taxation and savings for investment purposes then is necessary. A policy, in which the interest of the labourers’ group prevails over all other interests, is for a further industrial development not without danger.
A consequently executed mechanization with the intention to replace man-power with machinery, would not even then give opportunity for work in industry to the great number of persons living in disguised unemployment. A great population-density at the beginning of a much wanted industrial development is a great handicap. In Europe and North America the process of rapid economic development almost coincided with the rapid increase of population. In Java the population increase has arrived already near the “hunger-limit”, and the building up of an industrial basis for further economic growth is properly speaking still in the initial stage.

Cumbersome bureaucracy.

After the achieving of in dependency the influence of the government in economic life gradually extended. The control on economic activities was obtained by a great number of extensive controls, restrictive regulations and necessary special licences required by law. All these restrictions appeared to hamper the activities of many enterprises.
In the industrial and commercial field the government became an entrepreneur in its own right. The management of the government owned enterprises, the nationalized Dutch enterprises and estates, and monopolies is entrusted to officials.
A number of about 200,000 officials are working in the government owned enterprises. After the proclamation of martial law on March 14, 1957 the army too became an important power which acquired great in fluence on economic life in the country. This influence is felt by many concerns because it adds yet another layer of regulatory controls over the entire production process (van de Kroeff, 1959).
This development meant atrophy and deterioration for many enterprises in Indonesia.

Race relations.

Large-scale industry in pre war years was almost exclusively in the hands of Europeans, while medium industry was principally in the hands of Chinese and in a lesser degree in those of Indonesians. It was only small-scale industry, which had come up in Javanese society itself and which was exercised in the desa as house-industry and craft. Industrial development in Indonesia finds its starting-point in the great number of small-scale industries and the much smaller number of medium industries managed by Indonesians themselves. Out of this will have to proceed an industrial middle-class and afterwards the great-industrials.
In the period after the beginning of in dependency in Indonesia the policy of many Indonesian governments was directed towards changing the situation, in which large-scale industries were almost all conducted and managed by Europeans and Chinese, and to shape a situation, in which and through which all capital-intensive industries will be managed by their own people. From existing industries, estates and import- and export firms, as far as they were conducted by persons of foreign nationality or origin, their possibilities of development were practically taken away. In the period 1950-1956 inclusive, the number of industries falling under the ordinance for the regulation of industries and managed by foreigners of Indonesian citizens of foreign descent increased with 5%. in the same period the number of industries falling under the above mentioned ordinance and conducted by Indonesians by birth increased with 60% (Kraal 1957).
This policy-however understandable it may be – entails that ever more competence is placed into the hands of less experienced people. Though cooperation may be much more fruitful than intolerance, it does not seem likely to-day, that these profits will benefit industrialization.

The insecurity.

The insecurity, which has come into existence through civil war since 1958 raging in number of islands of the republic of Indonesia, has created an unfavourable climate for the development of industrialization, a.o. By a great decrease of important export commodities (rubber, copra, palm-oil, tabacco). This is also and in a greater degree the case with the serious and progressive inflation. The inflation, which has appeared in the money-economy since 1951 and in a larger degree since 1954, while up till the present no change for the better has set in, renders productive exploitation of a great number of industries practically impossible. In the period 1954-1959 the total money volume, is tripled; it increased from Rupiah 11.1 to 34 billion.

The increasing difficulties of transport facilities.

The increasing difficulties in transport facilities, both on land an by sea, hamper through the limited import of motor-car accessories and railway materials, the insufficient upkeep of the motor-roads, the decrease of inter insular shipping communications, a favourable industrial development.

The insufficient supply of energy.

The insufficient energy supply, which can be offered by the power projects in Indonesia to small-scale industry and great industrial projects, forced a number of factories to self-supply by means of their own power generator, which as a matter of course raised the coast of production.
Rapid industrialization seems to have in Indonesia and especially in Java a critical prognosis.
The significance which a contingent prosperous development of an Indonesian industry with export products for the world-market might have for the prosperity of the Javanese population, will be greatest with a constant or better a decreasing population-density. Would a rapid industrialization, - even without a special population-policy with an official program for organized action of the government for the attainment of a more favourable demographic condition in Java than exists nowadays, - have any significance for the rise or the prevention of a falling of the present low standard of living?
It is uninmaginable that a possibly prosperous industrial development of capital-intensive industry in Indonesia, which has hardly left the planning stage, will be able to warrant to an ever-growing population the present living standard, or even a mounting living standard, permanently.
Industrialization is a slowly-moving process, which will last for some decennia, slow at any rate when compared to the process of the Javanese population growth.
For the present situation it will only have a small significance as a relief. It is still an unanswered question, if after some decennia there will still be offered enough foodstuffs in the world-market, seeing the rapidity with which the world population grows. The world situation is not such, that rice may annually be bought in unlimited quantities.
There is most positively more demand than offer. The import of rice in Indonesia will be able to have only a limited significance for the rice-supply, which will naturally have to depend on home rice-production. The population-problem in Java and the development of industry in Indonesia are partly interwoven and in many ways interdependent. With a growing population in Java it is not to be deemed probable that – even with a moderately propitious industrial development in Indonesia – prosperity will rise in a measure worth mentioning. The increased production will have to feed so many more persons, that a rise per capita does not seem likely. Industrialization without a population-policy will not be sufficient for an increase of prosperity.
At best it would make the present low standard of living possible for a larger population for some time. If this should happen, the population would have increased with many millions and a greater population problem would have resulted from all the trouble taken. With a population policy, in which the rapid growth would be controlled and possibly come to a standstill, before the population becomes unmanagably large, industrialization might gain significance for the people’s prosperity. To our thinking it is vitally important for the development of Javanese and Indonesian economy, that the population-situation arrives at a balance by controlling the birth-rate.
Will the changes, which in future are bound to appear in the Javanese community and in its pattern of culture, be such that out of this still strongly communal society with an adat giving little freedom for individual unfolding of capacities can grow a fit basis for the development of small-scale industry towards a capital-intensive industry?
Will the political and economic conditions, which have at present a harmful influence upon the industry now existing, go on to exist for a long time yet and thereby hamper the starting of industrial development?
Starting from the supposition, possibly too optimistic, that industrial development is in principle possible in Java, we fear that, before industrial development could find a favourable climate, both by accepting the conviction that a further population-growth makes an increase of prosperity impossible, and by the people taking a mental attitude of rationalized individualism, the padi will have to be sown and harvested quite a number of times more.