Apr 29, 2006

On Sachs: The End of Poverty

Sachs laid his argument on some elements as follows. First, lack of effort to provide basic needs such as health, water sanitation, and food in developing countries. Sachs believes it is somewhat practical but rich countries did fewer investments to provide it. Second, isolation comes from specific circumstances such as geographic, climate, soil so that people can’t get developed rapidly. In addition, some of them were also neglected being involved politically, economy, international market and trade. Third, the way to perceive development has to be changed by diagnosing problems, reducing generalization and doing it case-by-case analysis. Fourth, the LDC countries need for resources for development by increasing development aid and setting up proven technology. It is quite paradoxial that only smaller amount of aid i.e. 6¢ from US to Africa in 2002.[1] This brings to the fifth point; to enable people by giving adequate resources to do so. This is done by reallocating funding within country.

Sachs approach’s was based on assumption that development as process transformation from traditional society to modern society which changes from simple to complex technology, subsistence farming to cash crops and human power to machine power. His argument that countries should be brought into ladder of development is analogous to Rostow’s on 5 stages of development. In order to achieve modern state, countries should pass some stages of development. Advance technology would drive investment, increase productivity and stimulate them to market in order to benefit also from international trade.

On the other hand, increasing productivity using technological innovation will reduce labour absorption so that increase unemployment. Import substitution strategy also requires intensive capital goods as well as raw material then depreciates foreign exchange and balance of payment. The worst case is when the countries fail to diversify primary agriculture export until they are unable to pay additional capital needed. Therefore it needs more capital, which can be gained from international assistance. This makes them more dependent to their creditor[2] as a consequence of modernization similarly happened in Latin America.

I do not agree to his proposal on aid for development. Aid nowadays becomes a way to tie up developing countries and let donor dictates them. We suppose that aid would go directly to families but it isn’t. Government uses it for extracting resources in order to provide goods and service and achieve government agenda. It should be noted that aid is also such a business that donors want to get profit from their investment. Aid is just a means to an end but not the end itself[3]. In his proposal, Sachs didn’t address structural problems such as income and resource distribution that makes difficult for countries to do development. Behind the idea of ladder of development, it is worth to think the seriousness of developed countries to make development works as they might kicking the ladder to prevent developing countries to climb up[4].

Reference:

Adams, Patricia and Lawrence Solomon, In The Name of Progress, Earthscan Publication, London, 1985 (pp. 37-38)

Apter, David E., Rethinking Development: Modernization, Dependency and Postmodern Politics, Sage Publication, Newbury Park, 1987 (pp 17)

Chang, Ha-Joon, Kicking Away the Ladder – Development Strategy in Historical Perspective, Anthem Press, London, 2002 (an article based on his book)

Kay, Christobal, Latin American Theories of Development and Underdevelopment, Routldge, London, 1989 (pp 129-130)

Rojas, RĂ³binson, Modernization Theory And The Laws Of Social Change, 1996, <http://www.rrojasdatabank.org/capital8.htm>

Time Magazine, 14 March 2005 (pp 44-54)




[1] Time magazine, 14 March 2005, p. 54

[2] Sunkel (1967:51-5) as cited in Cristobal Kay (1989: 130)

[3] Patricia Adams and Lawrence Solomon, In The Name of Progress, Earthscan Publication, London, 1985 (pp. 37-38)

[4] Ha-Joon Chang , an article is based on his book, Kicking Away the Ladder – Development Strategy in Historical Perspective, Anthem Press, London, 2002.

Apr 21, 2006

Forest Property Right in Indonesia: Introduction

Forest has been acknowledged as state property right in Indonesia since Dutch colonial era in the early 19th century (McCarthy 2000b). It was based on forest destruction that happened in Java in 1808 hence colonial bureaucracy would manage trees, land and labor. In that era, land was made available for sugar, tea, rubber and coffee production. Colonial authority was also encouraging private investment in agriculture plantation. Agrarian act of 1870 thus facilitated this by taking all land that were not certified under state property right. After Indonesia independence, the important standpoint is in 1967 where Foreign Investment Act no.1 and Forest Law No.5 were passed, enabling the large-scale exploitation of forest resource (Peluso and Harwell, 2001; McCarthy 2000a, 2000b). The law stated in article 5 that all forest in Indonesia territory including resources upon it are belong to the state. State is also given authority to confirm and control planning, functioning, supplies and utilizing forest on condition that give benefit to citizens and state[1]. Under that law, it divided forest area into land use categories stand for objectives of timber production, conversion to agriculture and forest conservation. To emphasized state control over forest, there were series of forest mapping exercise[2]. Government then produced forest land use plan (TGHK) which comprises of areas such as protection forest, nature conservation area, production forest, limited production forest, conversion forest and area for other uses. In area mapped as production or limited production forest, concession is given over 35 years under supervision of ministry of forestry (MoF). The essay is proposed to answer central question on how state based property right is representing agrarian change?. From the two different point of view, new-institutional and class-based theory would be employed in order to understand and explain the central question. Each of theory would address different problems from the same reality. Under new institutional approach, the problem focus on what would lead concession holder to internalize moral hazard? In the other hand class-based approach would deal with how will state-based property right lead to process of landlessness? The paper would arrange and present the analysis in three parts, first, explanation of change under new-institutional theory and followed by class-based approach on state property right. Second, to compare both two theories in explaining the question in term of its contrast and similarities, strengths and weaknesses between approaches. The analysis would also decide what approach best explaining phenomena despite of its weaknesses. Third, to conclude and answer the problem under particular approach set in part two.