ACADEMIC
project on environmental scarcities, state capacity, & civil violence
The Case Study of Indonesia – Section 5
by Charles Victor Barber
World Resources Institute
Cambridge: American Academy of Arts and Sciences and the University of Toronto, 1997
V. NATURAL RESOURCE SCARCITY AND CONFLICT IN THE NEXT TWENTY-FIVE YEARS: PROBABLE IMPACTS ON STATE CAPACITY
Currently Indonesia is not experiencing widespread social conflict arising from scarcities of natural resources. Resource scarcities and conflicts are not appreciably eroding the state’s capacity to maintain power, make policies, or implement them. Other factors, discussed in Section III, are more important determinants of state capacity at the present time. However, transformations in Indonesia’s economy, ecology, and society over the next twenty-five years will likely be as dramatic as those of the past three decades. If current trends in natural resource control, exploitation, and distribution of benefits continue or deepen — and if the regime does not respond innovatively — conflicts over natural resources will greatly intensify. These conflicts will erode the capacity of the state. This analysis is necessarily speculative.
Analysts must consider a key “wild card” — the political succession from the Soeharto era. Natural resources scarcities and conflicts are unlikely to be direct factors in shaping this transition. However, these scarcities and conflicts substantially contribute to public frustrations with the current regime and political process, frustrations that boiled over in July 1996. Moreover, the process and outcome of the transition will have important consequences for the state’s capacity to effectively resolve resource-related challenges and conflicts. Thus, it is difficult to separate predictions about the relationships of resource scarcity, conflict, and state capacity from predictions about the process and outcomes of the transition to the post-Soeharto era.
Soeharto’s sudden removal by death or illness may be followed by a period of instability, temporary (or permanent) direct military rule, and a rise in repressive measures to maintain the political and economic status quo. These factors have the potential to exacerbate resource-related conflicts, batter the economy (as skittish foreign investors pull out and donors put the brakes on aid), and decrease the capacity of the state to adapt creatively to rising social demands. In the extreme case, instability and repression might fuel renewed separatist revolts and religious strife, and lead to a widespread breakdown in civil order which seriously damages the economy. Although this scenario seems fairly unlikely, it is not out of the question.
A gradual transition to a new president acceptable to key groups in the military, bureaucracy, and private sector — and tolerated by the general public as the price of continued stability — could produce a completely different scenario. State capacity would be enhanced if the new president implemented certain changes. Prospects for a stable, prosperous Indonesia living within the limits of its resource base would increase dramatically if Soeharto’s successor undertakes certain reforms. The new president could accelerate moves toward greater decentralization, democratization, and accountability of governance; strengthen the current push for poverty eradication and greater equality among regions; rein in the conglomerates; reduces cronyism; place real teeth in environmental protection policies; and give real meaning (and finances) to the rhetoric of community-based natural resource management and “bottom-up” development. Unfortunately, this scenario is unlikely. In the near term, the inertia of bureaucratic norms and habits, the power of the conglomerates, and the progressive erosion of community-based institutions and resource management capacities put this vision out of reach.
Somewhere between these “disaster” and “utopia” scenarios lies the much more likely ground of “muddling through.” The transition to Soeharto’s successor will inevitably be rocky, and will have some short-term impacts on investor confidence and, hence, economic growth. As Adam Schwarz notes:
A dizzying array of elite groups will be jockeying for influence and trying to reform and update existing mechanisms for protecting their interests. The military will be positioning itself to regain the political high ground, maneuvering to get Soeharto to step aside gracefully, and trying to keep the whole process as smooth as possible . . . Civilian politicians will attempt to secure in the uncertainty of the transition period a higher profile for the Parliament, a more equitable sharing of power with the military, and some safeguards against the possibility of another thirty-year president.215
The events of mid-1996 provided a taste of what may lie ahead in the period following Soeharto’s death or retirement. Negotiations among military, bureaucratic, and business elites — and the wishes of Soeharto — will likely produce a consensus president. The president will be chosen because he216 is committed to the status quo while he pledges to incite some change. The personal power of the president will likely be reduced, with power decentralized to major ministries and, to a lesser extent, provincial governments, the Parliament, and the judiciary. The military is unlikely to step in and rule directly, but will probably take a higher political profile, at least until the situation stabilizes.
The succession could provide the opportunity for bolder-than-usual policy changes. Yet as a result of thirty years of political stability and economic growth, a vast range of actors and interests are bound to a common goal — the maintenance of the status quo. Although many old faces are sure to fade from the political scene, radical changes, either good or bad, seem unlikely.
The “muddling through” scenario probably will not equip the state with the capacity to adapt and effectively respond to intensified social pressures caused by population growth and rising per capita consumption amidst a declining resource pool. Scarcity and conflict will erode state capacity along all dimensions. The coherence of the bureaucracy is likely to decline in the near term without Soeharto’s strong unifying hand. The level of ingenuity — a key output of state capacity needed to address growing social pressures and political and economic changes — will diminish.
Likely Trends in Natural Resource Scarcity and Conflict
Predicting the future is risky, especially when assessing future environmental trends and their socioeconomic impacts. Technological innovations make dire predictions appear absurd in hindsight. Even so, a recent attempt by the World Bank to predict key demographic, environmental, and economic trends for the next twenty-five years yielded sobering results.217 By 2020, Indonesia’s population will likely rise from 180 million to nearly 260 million, a 45 percent increase. Fifty percent of that population will be urban, up from 31 percent in 1990. Urbanization will increase pressure on Java’s irrigated rice lands, some 10 percent of which may be converted to municipal and industrial uses over the next two decades. Total GDP will increase by 320 percent over 1990, and fully 63 percent of GDP will come from manufacturing and services by 2010. Demand for petroleum products by 2020 will expand nine-fold, and the demand for electricity thirteen-fold. At current rates of extraction, proven oil reserves will be exhausted by about 2015, and the production of coal and natural gas will subsequently skyrocket. To meet rapidly rising demand for energy, Indonesia will likely be a net oil importer by the year 2000.
In the forestry sector, if current deforestation rates continue, an additional 15 million to 32.5 million hectares of forest will be lost by 2020 (depending on whether higher or lower current estimates are used as a baseline). Demands for agricultural land, timber plantation sites, and coal mining will compete with logging. These demands will intensify pressures on forest resources and probably increase the deforestation rate. The government’s generous estimates in the 1991 Tropical Forestry Action Programme conclude that by 2030 about 84 million hectares of natural forest will remain, about 53 million hectares of that under some form of protection.218 However, timber demand stood at 40 million cubic meters in 1990. Recent World Bank scenarios for future timber requirements project demand in 2020 to be 55 million cubic meters at the lowest, and 145 million cubic meters at the highest. This demand could rise to 195 million cubic meters in 2030.219 The prospect for a serious timber shortage seems likely given that the Sixth Five-Year Development Plan already reduced the government estimate of current natural forest cover from 107.5 million to 92.4 million. Even the government’s Forestry Action Plan concludes that “due to population and industrial growth, the projections suggest that the raw material situation will become critical in about a decade if Indonesia continues to maintain its market dominance and industrial pace, and its forest resource management and utilization efficiency do not significantly improve.”220 Timber plantations are the cornerstone of the government’s strategy to bring supply in line with demand. Yet the bulk of current investment in timber plantations is for stock to feed the new and rapidly expanding pulp and paper industry, not to replace timber logged from natural forests.
Under this scenario, natural resource scarcities are bound to rise. Scarcities will increase as supplies of nonrenewable resources (notably oil) are depleted, and renewable resources (such as forests, fisheries, and water supplies) are degraded (and thus effectively depleted for at least several decades). As population grows, per capita availability of the already shrinking resource pool will also decline.
Trends in distributive scarcities of natural resources are more difficult to predict. Jack Goldstone’s analysis from a number of early modern societies shows that a growing imbalance between population and resources polarizes incomes.221 The poor are marginalized. Elites consolidate control of dwindling resources, and thereby buttress their political clout and their resistance to increased state taxation. Therefore, as resources become scarce and their value rises, elites within Indonesia will have an incentive to seize control of these resources.
In the forestry sector, the transition of investment from logging concessions to timber plantations, and the conversion of degraded forestland into oil palm and other estate crop plantations, will likely exacerbate inequality. When the concession is active, logging deprives local communities of access to important forest resources. Yet in the long term, abandoned concessions have been an important, if technically illegal and unsustainable, source of new crop and grazing land for the landless. And if concessions have not been degraded, the logged-over areas continue to supply communities with forest goods and services. Intensively managed plantations, on the other hand, clear all vestiges of natural forest and exclude local populations. As already noted, much of the so-called degraded forestland targeted for plantation development is integral to local forest-based communities. These communities utilize secondary forest and scrub areas for tree crops (such as rubber and fruits), rattan, grazing fodder and many other resources.
Distributive scarcities are theoretically more amenable to state policy interventions than scarcities arising from population growth and resource degradation or depletion. Indonesia’s family planning program is largely a success, but it cannot halt population increases already in motion. Even under the best conservation and resource management policies, the country only has a finite amount of cropland, water, and forests, and ecosystems have limited carrying capacities. However, numerous policy reforms suggested in many studies and policy documents would immediately ease distributive scarcities. Technical complexity does not impede the implementation of these reforms. Rather, the regime’s general tendency to defend the interests of the few over those of the many obstructs change.222
But the situation is not black-and-white. Current New Order policies place the eradication of poverty and the reduction of regional inequalities at the top of the development priority list. These factors may have some ameliorative effect on the historical dynamic noted by Goldstone above. The goal of the Sixth Five-Year Development Plan (running to 1999) is to reduce poverty for 6 percent of the population.223 Although the poor may not get poorer over the next few decades, the income of the rich will grow much faster than the income of the poor. And significant policy reforms that might ease distributive scarcities are unlikely without structural changes in power.
As resource scarcities of all types increase, so too will conflicts over resources and resource rents. Local conflicts between communities and the state and private sector over the appropriation of land and resources will increase. As the resource pool shrinks and the number of claimants grows, disputes will arise more frequently. Whether these conflicts multiply, and take on an organized, anti-state political character, will largely be a function of the state’s level of ingenuity. The state must rein in predatory developers, share the benefits of development programs, provide effective dispute resolution mechanisms, and engender the perception in local communities that they are part of state-led natural resource development schemes rather than a casualty of them.
Likely Impacts on State Capacity
Appropriation and allocation of resource rents has strengthened and maintained the capacity of the New Order state. The availability of these resources will inevitably decline as will their contribution to the state’s financial resources. Development funding may not be greatly affected, as revenues from the manufacturing and service sectors will likely continue to grow. But these sectors do not provide patronage resources such as those available from the timber and oil industries. The state’s freedom to allocate privileges in these new sectors is constrained by the imperatives of global markets. As the world’s number one plywood exporter and a significant oil producer, the New Order has been able to use profits from these industries for political purposes and waste resources without appreciable pain. In the manufacturing and service sectors, Indonesia is just one of many developing countries competing for investment and markets. In a global economy that emphasizes the reduction of trade barriers, Indonesia’s industries will have to be efficient and competitive. In the secondary and tertiary sectors, crony monopolies, sweetheart deals, institutionalized bureaucratic corruption and other elements of the “high-cost economy” may lead to economic failure.
Degraded land, water shortages, and other effects of resource depletion will heighten demands for expensive rehabilitation and disaster management interventions. The expansion of cropland will also cost a great deal and exacerbate conflicts over land. For example, an expensive scheme to convert 1 million hectares of Central Kalimantan’s peat forests into irrigated rice seems destined to fan resource conflicts in that region.224 The state could increase the percentage of state rent capture to ameliorate financial pressures. However, the allocation of large rents from resource extraction to private actors has been part of a conscious political strategy to attract and cement allies to the regime. Powerful economic and political actors will lose in any effort by the state to raise rent capture from forestry. These actors are presently allies of the regime, but may join the opposition to survive the political realignments of the succession process.
Growing resource scarcities and conflicts will thus have important impacts on the capacities of the state. Section I argued that state capacity is best understood with respect to the following eight variables: human capital, instrumental rationality, coherence, resilience, autonomy, legitimacy, reach, responsiveness, and fiscal strength. Section III examined the general strength of the New Order regime. The remainder of this chapter revisits these variables, and examining those that may be significantly affected by resource scarcity and conflict over the next several decades.
Autonomy
The New Order state’s autonomy — the extent to which it can act independently of both domestic and international external forces, and coopt or constrain those opposed to its decisions and actions — is likely to decline as resource scarcities and conflicts increase. If scarcities augment the power of private sector elites, as argued above, elites will have more power to set or stymie state policies and actions. And while the interests of the private sector elite and the regime have largely coincided for the past three decades, that situation is not inevitable. As Goldstone notes, in some situations, “particularly times of elite insecurity owing to inflation and to rising social mobility and competition within their ranks, elites have turned into competing factions, driven by self-enrichment at the expense of their rivals and opponents, even when that meant starving the national state of resources needed for public improvements and international competitiveness.”225 The uncertainty of the presidential succession is likely to encourage that kind of behavior, as elites jostle to hold onto their concessions, connections, and other privileges.
As resources become scarcer and more valuable, and the number of elite claimants on those resources multiplies, conflicts such as the plywood marketing monopoly dispute and the reforestation fund controversy (discussed in Section IV) are likely to intensify. These conflicts will be exacerbated by the splintering of elite coherence that will surely accompany Soeharto’s departure. As Schwarz notes, “Inevitably, there will be some `repoliticization’ of Indonesian society, no matter how hard the military tries to keep this to a minimum. And the melange of informal politicking will undoubtedly put the coherence of the elite under strain. The various components of the elite have different interests and will have to compete to protect them.”226
The autonomy of the armed forces is likely to increase, as resource scarcities lead to politically significant conflict or natural disasters (such as more of the massive Indonesian forest fires of 1983 and 1994, or the deadly logging-induced mudslides that have killed hundreds in the Philippines and Thailand in recent years). The military will trade on the uncertainties of the presidential succession to strengthen the political clout that it has progressively lost since the early days of the New Order. Disorder, violence, and natural disasters provide fertile ground for the armed forces to enhance its role, arguing that ABRI is the only institution capable of saving the nation from such threats.
Widespread resource conflicts may provide opportunities for the Parliament and judiciary to increase their autonomy. Parliament’s current role as an occasional soapbox for aggrieved communities may expand into a more substantive role, as resource conflicts spread and the succession period provides a general opening for strengthening the parliamentary role. As the social demand for resolution of environmental disputes increases, the courts may be able to expand their scope for independent action. Demands of the growing domestic business class — as well as foreign investors and the World Bank — have already set the stage for a more rational and independent judicial system.
The autonomy of provincial governments will also grow in the coming years. The presidential succession will provide openings to expand the tentative steps towards decentralization taken over the past few years. The technical and managerial capacities of local governments are expanding steadily, if unevenly, among different provinces. Resource conflicts could augment provincial autonomy if local governments are better able to resolve them than the central government. But severe conflicts could cripple provincial autonomy as central agencies and the military intervene. And if orderly resource management becomes a source of provincial funding (through decentralization of taxation and licensing authority), increased resource conflicts could diminish independent provincial financial resources.
Coherence
As already noted, the presidential succession, independent of resource scarcity, is likely to diminish regime coherence — the degree to which the organs and agents of the state can be said to agree and act on shared ideological bases, objectives, and methods. As various agencies and factions take sides in particular conflicts to defend their interests, increased resource scarcity and conflict could further weaken coherence. Quarrels over control of declining resource rents may also reduce coherence: with claimants struggling for a power base in the post-Soeharto era, disputes like those over the Reforestation Fund and the plywood marketing monopoly could grow considerably more severe.
How would reduced coherence affect state capacity? Even now, the government apparatus is quite sectoralized. Various agencies often stumble over each other and find themselves at cross purposes. Examples of overlaps among protected areas, mining and logging concessions, resettlement sites, infrastructure projects, and resources claimed by local communities are already numerous (see Section IV).227 Without Soeharto’s strong hand, if disputes turned violent, government agencies, provincial governments, and private sector interests are even less likely to coordinate their objectives and activities. Rather, each will seek to insulate themselves from the negative effects of such disputes, and take what political advantage they can from them.
Legitimacy
As previously discussed, the New Order’s legitimacy rests in large part on the delivery of sustained development benefits to key elites and to the populace. Growing natural resource scarcity and conflict will undermine those benefits, as the disastrous economy of the early 1960s undermined support for President Sukarno.
The broad dynamics are simple. Increased scarcity, whether in terms of declining raw materials, arable land, or habitats and ecological services (such as mangroves or functioning watersheds), will decrease production in agriculture, forestry, fisheries, and other key resource-based sectors. Local conflicts such as those discussed in Section IV can halt production in certain regions, hinder efforts to replant degraded forests, and impede other restoration efforts. As Peluso convincingly demonstrates, local resistance can completely sabotage forest replanting schemes, even in the intensively managed and policed teak tracts of Java. And where peasant resistance causes repressive responses from the local government, the mutual trust and cooperative social ingenuity between government and citizenry suffers. Trust and ingenuity is necessary to develop innovative institutional arrangements for better resource management.228
At the macro level, declining state resource rents decreases the funds available to ameliorate production shortfalls (providing imported rice to areas with shortages, for example). The state’s legitimacy in the eyes of the hardest-hit local communities will evaporate rapidly under such circumstances, and at some point local complaints could achieve a nation-wide critical mass.
Some might argue that growth in secondary and tertiary sectors of the economy will provide sufficient employment opportunities to balance the losses that may accrue to local communities. According to this argument, the number of disaffected rural people will never reach a “critical mass,” because they will move to the cities and get jobs in the rapidly expanding sectors of the national economy. Over the long term, this may be the case. But the most significant civil violence in recent years erupted around expanding manufacturing industries. Workers have protested low wages, abysmal working conditions, and repression of their attempts to organize. The belief that traditional rural people can be rapidly transformed into urban factory workers without a great deal of social friction, displacement, and conflict, contradicts historical experience in many other countries and regions. Urban migrants have been pushed off their land by progressive industrial enclosures of forest and agricultural land, and brought together as factory workers on the bottom rung of the new global world economic order. These stresses will not likely produce a reduction in social tensions and greater governmental legitimacy.
If the presidential succession becomes a scramble by elites to maintain their power and privilege, this potential delegitimization process will intensify. The New Order has gone out of its way to reinforce the constitutional, legally correct origins of its power and of the political system through which it maintains power. The spectacle of a political brawl would sweep much of this away. The armed forces are concerned that the transition be a smooth one, with the maneuvers and bargains of the elite occurring behind firmly closed doors. Many observers, however, doubt that the transition will be very smooth: “Will he (Soeharto) leave office before he is pushed? Will he act to reduce the unpredictability of his own succession? There are few signs which would suggest a positive answer to either of these questions, unfortunately, and that augurs poorly for a smooth transition.”229
The potential for challenges to the regime would increase exponentially, if turmoil reduces the legitimacy of the overall political structure under disagreeable conditions. These conditions include deteriorating development gains, spreading conflicts over resources, the expansion of elite control and wealth, and the degradation of the resource base that millions of Indonesians depend on. Resource scarcity and conflict may exacerbate an already weak state legitimacy, but they will not be the engine of that decline. A smooth transition to a regime with higher levels of ingenuity could keep resource conflicts from delegitimizing the state.
Reach
Reach — the state’s ability to implement its programs and policies on the ground — would be gravely affected by an appreciable rise in resource scarcity and conflict. Reach is affected by drops in other indicators of state capacity. The loss of autonomy by state agencies in development programs would harm the quality and feasibility of their projects. Declining coherence would increase the likelihood of intersectoral conflict and overlap. One project might compromise the effectiveness of another — for example, public works agencies build roads through areas that the forestry ministry is trying to reforest for watershed protection. And the loss of coherence between central and provincial agencies would reduce the chances of getting projects carried out and services delivered, especially in the long term when local management and maintenance issues become crucial.
The loss of legitimacy would cause a further deterioration of local community support for government-initiated or mandated projects. This loss of support will hurt efforts to manage forests and fisheries. As noted above, communities hold an effective “local veto” over the implementation of programs and projects as their active support and involvement are key prerequisites for success.
Resource scarcities themselves, particularly those caused by the absolute decline of natural systems, will also directly erode the state’s reach. Reach will be affected regardless of the level of conflict arising from those scarcities. As ecosystems like forests, mangroves, and coral reefs become more degraded, it becomes more difficult and expensive to establish or maintain sustainable resource-based production systems.
Resilience, Responsiveness, and the Ingenuity Problem
The scenarios and potential developments discussed thus far assume — or at least imply — that the New Order is a passive state, whose fate will be determined by demographic, ecological, and political factors largely beyond its control. But this is by no means inevitable. Resilience and responsiveness are required to ward off the rising spiral of resource scarcity and conflict, political instability, and economic decline. Resilience is the capacity to absorb sudden shocks, and to adapt to longer-term changes in socioeconomic conditions, interests, and political demands. A state is resilient if it can supply the technological and social ingenuity to meet new challenges, adapt to intensifying complexity, and respond to growing social conflicts. Responsiveness is the capacity to meet demands emanating from society and sustainably resolve conflicts between these different interests. Responsiveness in large part measures the state’s capacity to deliver ingenuity to society in ways that satisfy needs, meet aspirations, and resolve conflicts.
As Homer-Dixon states, ingenuity is “ideas applied to solve practical social and technical problems . . . It is broader than `innovation,’ since innovation implies novelty; and, although ingenuity does not exclude novelty, practical ideas do not have to be novel to be classified here as ingenuity.”230 Homer-Dixon argues that as resource scarcities increase, societies must produce an increasing supply of ingenuity to counter the rising social disutilities created by scarcity. Failure to do so will cause social dissatisfaction to rise and multiply the potential for social conflict and disorder. He notes that societies require social (e.g., institutional) as well as technical ingenuity. Technical ingenuity introduce rapidly growing multipurpose tree species, but getting peasants to tend and protect these trees on a large scale requires social ingenuity to develop the institutions and economic incentives for community-based forestry. More broadly, social ingenuity establishes and maintains the institutions which can produce technical ingenuity.
Homer-Dixon argues the role of the state is central to the supply of ingenuity as it provides the preconditions for ingenuity to blossom within the society. The organs of the state can also supply ingenuity. He notes, however, that much of the ingenuity needed to deal with natural resource scarcities must come from the bottom-up: “The ingenuity needed to adjust to resource scarcity is not only produced by people at the top of the social hierarchy: many of the ideas needed for successful adjustment are produced at the community and household level as people learn, for example, how to reform local institutions to solve collective-action problems.” Therefore, ingenuity need not imply novelty: In a country such as Indonesia, many solutions to rising resource scarcity can be found in long-standing traditional systems of resource management.
Homer-Dixon also states that heightened scarcity raises the demand for ingenuity, while also constricting the supply: “The supply of social ingenuity . . . will be vulnerable to stresses generated by the very scarcities ingenuity is needed to solve.” Thus, scarcities may erode the ability of both the state and the society to produce new (or to rediscover) cultural and institutional solutions needed to counteract scarcity.
The relationship between growing resource scarcities and state capacity in Indonesia depends in large part on the ability of the state and society to produce and deliver an expanding supply of social ingenuity. And the prospects for a peaceful and stable presidential succession depend on the degree of political ingenuity that the regime can muster. On both counts, current conditions give little cause for optimism, and Indonesia seems headed towards a growing “ingenuity gap.”
Indonesia needs to produce and deliver increased quantities of social ingenuity to meet the three distinct challenges posed by growing scarcities of renewable resources. First, social and institutional ingenuity — including traditional knowledge — provides innovative technical responses to the complex, synergistic, and cross-sectoral nature of renewable resource degradation. Second, effective responses to this degradation require not only technical but also locally tailored, participatory social and institutional solutions. Ingenuity is required to develop both local and state institutions which can devise and deliver these solutions. Third, Indonesia’s renewable resource scarcity problem is driven by resource monopolization and over-exploitation by powerful private sector actors. Therefore political ingenuity is needed to curb the predatory nature of the private sector elite and to put in place economic incentives that favor sustainable resource use. This last element is essentially political because the actions and policies needed — in a technical sense — have been exhaustively researched and put forward in a host of studies by local and national NGOs, the World Bank, and even the Ministry of Forestry, as the citations in Section IV attest.
Dealing with Complexity and Synergy
Scarcities of renewable resources have complex causes and effects, as was discussed for forests in Section IV. Homer-Dixon notes that most renewable resources are components of complex and dynamic ecosystems. “The overextraction of one resource in such a system can produce ramifying scarcities in the surrounding ecological system,” and economic disruptions are thus often multiplied. “An economy not only has to find substitutes for goods and services provided by the scarce resource itself, it also often has to find substitutes for the goods and services that are causally dependent upon the scarce resource.”231 This dynamic is clear in many of the case studies discussed in Section IV. Logging concessions in the Bentian area of Kalimantan, for example, deplete not only timber, but also water supplies, wildlife, and a wide variety of nontimber forest products, while the logging of Yamdena island threatens surrounding reefs and their fisheries.
The Indonesian state apparatus is not, however, equipped to provide the kind of ingenuity needed to deal with these complexities. The forestry bureaucracy, as noted in Section IV, is highly sectoralized and focused on the production of timber. Timber prices are set even below conventional market values. These low prices do not internalize the economic costs that accrue in other elements of the forest ecosystem, or in other ecosystems such as farmers’ fields or near-shore fisheries. And the requirement for ingenuity to understand and manage complex systems such as tropical rainforests and coral reefs rises sharply when the current synergistic processes of degradation are underway.
Part of the ingenuity gap results from the general limitations of human knowledge on how complex natural systems function and under what pressures they decline, to what degree, and with what effects.232 This general ignorance is compounded by the relative lack of scientific capacity in most developing countries (although Indonesia is better off than many in this regard).
Yet much of Indonesia’s ingenuity gap in understanding and managing complex ecosystems is institutional in nature. We do know that heavy siltation destroys coral reefs, and thereby diminishes the near-shore fish catches on which most poor coastal communities depend. Missing are the institutions which could coordinate forestry and fisheries objectives and policies, and which could make upstream activities responsible for their downstream effects.
Flexibility and Community Participation
To effectively respond to resource scarcities, the state and society must supply the ingenuity to develop locally specific, participatory, and flexible approaches. Bottom-up as well as top-down ingenuity is needed to design supportive institutions, discover new technical solutions, mobilize financial and human resources, and clear away the opposition of vested interests. The New Order state’s dismissal and derogation of adat systems of decision-making, dispute resolution, and natural resource management cut off an important source of ingenuity. In addition, these measures build local resistance and resentment — which further stifles participation. Although adat traditions are not adequate to deal with the unprecedented new pressures of technology, the market economy, and other forces, they do form an important basis for local social cohesion and action.
The present capacities of many local communities to organize, innovate, and act are weak after decades of being told what to do by outsiders, and having new “community” institutions imposed from above. The problem is not so much the erosion of local resource management practices. Instead, the stunting of local institutions of social cooperation undermines ingenuity generation. For reasons already noted, Indonesia is hard-pressed to supply this ingenuity — a gap already exists, and it will grow.
Improving Equity and Accountability in Resource Control and Use
As preceding chapters have discussed at length, weak accountability of state and private sector institutions intensifies resource scarcities, fans resource conflicts, and stunts the development of institutions. These institutions are unable to resolve disputes, reduce unsustainable resource exploitation, and establish a more equitable distribution of the costs and benefits of resource control and use. Legal and institutional ingenuity is needed to establish more secure and equitable property rights over forest resources. Property rights would displace the current open access situation where elites supplant community resource access, and all actors lack incentives to protect resource sustainability. Political ingenuity could rein in the large, politically connected conglomerates — even those with close ties to the president’s family — without provoking further political conflict. Ingenious economic policies are required to devise and enforce incentive systems to ensure that the costs of resource exploitation are internalized by those who exploit and sell them. And administrative ingenuity is sorely needed to open the natural resource policy-making process to a wide range of interests and expertise.
Raw ideas are abundantly available both within and outside the government. However, the institutional structure and long-standing perceptions and biases of the New Order make it very difficult for these ideas to be translated into practical action. The fluid presidential succession period may provide an opening for change. Schwarz, for example, believes that the emerging cracks in the elite exposed by succession issue “present, perhaps, the most optimistic case for real political change in Indonesia.”233 But if the prediction, above, for a “muddling through” scenario is borne out, there may be little real change, and the ingenuity gap may rapidly grow into a chasm. Crisis and conflict over resources (and other issues), may grow so severe that the status quo goes down in flames. This crisis could become the spur of last resort to unleash the ingenuity that Indonesia so sorely needs in coming decades. Indonesia’s history, at least in the 1960s, lends some support to this rather pessimistic prediction. Hopefully the rebirth of political and institutional ingenuity will not come too late. Yet it is clear that scarcity and conflict, which requires great ingenuity to overcome, in themselves often reduce the capacity to produce it.
Conclusion
To ameliorate growing scarcities of renewable resources, minimize the spread of scarcity-induced conflicts, and protect the capacity of the state from erosion, the New Order must take its “ingenuity gap” seriously, and act to close it. Failure to unfetter the generation and delivery of ingenuity in the areas noted above will stunt the ability of both state and society to counter the impacts of growing resource scarcity. The coming decade will likely include various challenges and threats. These challenges include impediments to the continued growth of the economy, heightened social dissatisfaction, serious threats to the legitimacy and overall capacity of the Indonesian state, and intensifying social conflicts — some violent. Failures of ingenuity are likely to reinforce themselves: the lack of creative state adaptation to increased scarcities and conflict may in itself further limit the state’s ability to respond effectively. As conflicts grow more severe, the state may cut itself off from innovative solutions that might otherwise arise from local communities and other elements of civil society.
This need not be. Indonesia’s rich resources and incredibly diverse cultures provide the basis for rapid and sustained increases in ingenuity equal to the challenges of rising population and consumption, a fixed resource base, and growing scarcities. The history of Java, where nearly 100 million people — 65 percent of the population — live on 7 percent of the country’s land, shows the potential of the Indonesian people for productive social and technical adaptation to growing scarcity (although other islands, with far poorer soils, could not support anything near Java’s population density). The “portfolio” subsistence strategies of many Outer Islands peoples — in which reliance on a wide variety of crops and income sources secures the people against scarcities of any one source — provide another important example of social adaptation.
Nor is the New Order state apparatus bereft of ingenuity. The dramatic economic rise of Indonesia since the 1960s, the major strides made against poverty and illiteracy, and the deft handling of global economic turbulence in the 1980s amply illustrate the ability of this regime to produce ingenuity and act upon it. Anyone who has spent time working with officials of the Indonesian government will attest that there are untold numbers of state officials bursting with innovative ideas — both visionary goals and rudimentary practicalities — on how to better realize the objectives of sustainable development, stability, and equity. If the combined ingenuity of the state and the society can be unleashed from the outmoded and harmful structures, attitudes, and webs of special interests that have developed over the past thirty years, Indonesia will stand a good chance of surmounting the challenges of resource scarcity that all of humanity faces on the cusp of the twenty-first century.
