ABSTRACT

INTRODUCTION The initial focus of the technocrats on monetary techniques to stabilise the economy and attract Western aid was not universally accepted, even within state circles. In the first public opposition to the BAPPENAS strategy, in 1967-1968 a number of prominent political figures criticised the focus on foreign-led rehabilitation and the contractionary measures used to control inflation. They proposed instead a state-led programme to rebuild the infrastructure, especially communications, arguing that increased state expenditures were necessary to stimulate development. They also urged Indonesia to pursue a non-aligned foreign economic policy, avoid becoming over¬ dependent on Western aid and investment, particularly from the US, and increase its level of cooperation with other Asian and African countries. These proposals were based on the belief that public policy should give priority to fulfilling broad social needs rather than be based on purely fiscal considerations.1