Widjojo Nitisastro

Widjojo Nitisastro was born in Malang Residency, on 23 September 1927, and grew up in Surabaya. He came from a retired elementary school superintendent's family. His father was an activist with the Greater Indonesia Party (Parindra). In 1945, when the Indonesian National Revolution erupted, Widjojo joined the Indonesian Student Army (TRIP). In the Revolution, he almost died somewhere between Ngaglik and Gunung Sari areas of Surabaya.[4][5]

After the end of the revolution, Widjojo taught at a junior high school for 3 years. He then continued his higher education at the Faculty of Economics of the University of Indonesia (UI), specializing in the field of demography. While still a student, he, together with Canadian demographer Nathan Keyfiz, wrote a book entitled "The Problem of Indonesian Population and Development." With the foreword being written by former Vice President Mohammad Hatta, who wrote, "An Indonesian son with his knowledge of the problems of his homeland, has been able to work with Canadian statisticians. Processing his solid thoughts and putting them into a weighty book." Widjojo eventually graduated with the with Cum Laude predicate.[5] He would later be appointed by the Dean of the Faculty of Economics (and future Minister of Research), Sumitro Djojohadikusumo, as the Director of the Institute for Economic and Community Research.[4] Widjojo Nitisastro later became a full professor of economics at the University of Indonesia in Jakarta at the age of 34 in 1962.[6]

Shortly after, Widjojo continued his doctoral studies at the University of California, Berkeley. He worked on a dissertation entitled “Migration, Population Growth, and Economic Development: A Study of the Economic Consequences of Alternative Patterns of Inter Island Migration.” There, Widjojo met a number of other economic students, including future ministers Mohammad Sadli, Subroto, Ali Wardhana, and Emil Salim. This group would later become known as the Berkeley Mafia, a group of technocrats who are considered to have instilled neoliberalism in economics for the sake of American interests in Indonesia.[7]

After completing his studies, Widjojo returned to Indonesia.

When he returned, Indonesia was under the guided democracy period of President Sukarno. Under this policy, the Indonesian economy leaned towards economic socialism/communism. The economic situation in Indonesia at that time was chaotic, with high inflation rates and high prices. Widjojo expressed his opinion to the government to change the paradigm of the Indonesian economy. During his inauguration as a professor of economics at the University of Indonesia on August 10, 1963, Widjojo read a speech entitled "Economic Analysis and Development Planning." He suggested that economic analysis should be included in government policy making, as well as a combination of market mechanisms and government intervention instead of allowing the market to be too free or otherwise making the government too powerful. However, his suggestions were not heard by the government.[8]

In 1966, General Suharto took over power in Indonesia from President Sukarno through the Supersemar order. Although he did not become president for the next two years, Suharto began to build the foundations of the government that would later be referred to as the New Order regime. In August 1966, Suharto held a military seminar, which was attended by Widjojo and a number of his colleagues.[9][4]

In the seminar, the economists presented their ideas and policy recommendations to Suharto. Suharto was impressed by their idea and asked them to work as a Team of Experts in Economics and Finance. This appointment marked the beginning of Widjojo's career. Other members of the group, all senior Indonesian economists, were generally regarded to include Professor Ali Wardhana, Professor Moh. Sadli, Professor Emil Salim, and Professor Subroto. Later, in 1970, he and several other economists who graduated from the University of California, Berkeley were accused of being the Berkeley Mafia formed by the CIA to instill economic liberalism in Indonesia.[10]

In 1971, Widjojo was appointed State Minister for National Development Planning, a position he held until the early 1980s.[11] As minister, he and his colleagues in the 'Berkeley mafia' used a neo-Keynesian approach to balance the state budget, control the money supply, re-establish the position of financial institutions, and open the door as wide as possible for foreign investors.[4]

While leading the ministry, Widjojo made an economic plan that was contained in the Five-Year Development Plan. According to economist Mudrajad Kuncoro, who is professor of Economics at Gadjah Mada University, in his column in the Gatra magazine, said that the focus of the Five-Year Development Plan was macroeconomics. In the New Order, the Minister for National Development Planning became a crucial institution because it held the key to development at both the central and regional levels. The system worked as it adheres to centralized planning, both in terms of policy and funding. With this flow, regional development is more prominent because both planning and implementation are “centralized.”[4]

Widjojo Nitisastro (right) at an IGGI meeting in The Hague in June 1983 with Ministers Ali Wardhana (left) and Eegje Schoo (Netherlands).

During his career in government, Widjojo was the head of many Indonesian delegations to numerous international meetings such as the Inter-Governmental Group on Indonesia (IGGI), the Paris Club, and World Bank and International Monetary Fund (IMF) meetings. He was also a member of the South Commission (headed by president Julius Nyerere) as well as numerous other international committees). Widjojo also served as Coordinating Minister for Economy, Finance and Industry from 1973 until 1983.[12] In 2008, the Faculty of Economics at the University of Indonesia awarded Widjojo its most prestigious award, the Wirakarya Adhitama, for a lifetime of dedication and extraordinary achievements.[13][14]

After the fall of Suharto in 1998, vice president B. J. Habibie became president.[15] Habibie and Widjojo had two conflicting views on economics, and Widjojo's role in the Indonesian economy not as strong as it used to be under Habibie. However, during the Abdurrahman Wahid administration, he was trusted to lead the Indonesian Economic Team at the Paris Club meeting in mid-April 2000 to discuss rescheduling the repayment of Indonesia's debt for the period April 2000 – March 2002 amounting to US$ 5.9 billion.