Beyond Political Skin: Convergent Paths to an Independent National Economy in Indonesia and Vietnam

Abstract

This study discusses the transformation from a colonial into a national economy in Indonesia and Vietnam. It focuses on two intertwined processes of economic decolonization and reconstruction in the two countries after the Second World War, paying special attention to political and institutional factors involved in these processes. The study demonstrates that, although differences in the political situations resulted in the adoption of divergent strategies, Indonesia and Vietnam were in fact pursuing similar long-term goals, namely: attaining a national independent economy. The Indonesian government was determined to get rid of the economic legacy of Dutch colonialism by placing the whole economy under the strong state control and ownership, in accordance with the spirit of Guided Democracy and Guided Economy in the late 1950s and the early 1960s. This effort resembled much the socialist transformation of North Vietnam in the 1950s and the various means by which the government of South Vietnam concentrated economic power in its hands during the late 1950s and the early 1960s.