Handbook on the Northeast and Southeast Asian Economies
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Handbook on the Northeast and Southeast Asian Economies

Edited by Anis Chowdhury and Iyanatul Islam

This original Handbook on the Northeast and Southeast Asian Economies provides a broad overview of economic and social developments in the countries covered (Brunei Darussalam, Cambodia, China, Hong Kong, Indonesia, Japan, Lao, Malaysia, Myanmar, North Korea, The Philippines, Singapore, South Korea, Taiwan, Thailand and Viet Nam). The analytical narratives on the economic transformation of these economies draw on existing literature, and highlight the interactions of socio-political factors. They examine the role of economic policies and the influence exerted by historical and political circumstances.
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Chapter 9: Indonesia

Thee Kian Wie


Thee Kian Wie A short political history On 17 August 1945, two days after the Japanese unconditional surrender to the Allied Forces, Sukarno and Hatta, Indonesia’s two most charismatic leaders, proclaimed Indonesia’s independence. Disregarding this proclamation, the Netherlands was intent on reclaiming its colony from the Japanese. In the following four years, heavy fighting broke out between Dutch troops and the fledlging Indonesian army and irregular troops. Through the mediation of the United Nations, the Netherlands and Indonesia called a truce in 1949. The Indonesian and Dutch delegations got together in a Round Table Conference (RTC) in The Hague, in the autumn of 1949 to discuss the terms of the Dutch transfer of sovereignty to Indonesia. The official transfer of sovereignty from the Netherlands to Indonesia took place on 27 December 1949. The achievement of political independence, however, was not accompanied by economic independence. The Dutch delegation at the RTC had extracted a concession from the Indonesian delegation that their extensive business interests could continue to operate without hindrance in an independent Indonesia. This problem as well as the Dutch refusal to hand over West Irian (Dutch West New Guinea) to Indonesia doomed from the start amicable relations between the Netherlands and Indonesia. The deteriorating relations between the two countries in late 1957 led to the takeover of all Dutch companies in Indonesia, and their subsequent nationalization in 1959. Hence, with one sweep, the vast Dutch business interests, which had operated in Indonesia since 1870, were swept away. The...

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