by A.M. Hendropriyono
Professor of the Philosophy of Intelligence at the State Intelligence College (STIN)
Introduction
Indonesia's national economic policy is entering a crucial phase in its modern history. Amidst global uncertainty, technological disruption, and post-pandemic fiscal pressures, Indonesian Minister of Finance Purbaya Yudhi Sadewa has made a policy breakthrough marking a new direction for national development.
Differing from the Berkeley Mafia technocratic orthodoxy that dominated Suharto's New Order era, Purbaya's approach is more progressive, inclusive, and oriented toward social justice. He combines fiscal discipline with strategic state intervention, aimed at protecting the common people and strengthening national economic sovereignty.
These steps represent a paradigm shift from a free-market model to a hybrid economy—a system that balances market efficiency, state intervention, and equitable distribution of development outcomes.
Not Berkeley: The new direction taken following the Berkeley Mafia School Orthodoxy (Widjojo Nitisastro, Emil Salim, Ali Wardhana) played a major role in stabilizing the post-1966 economy. They introduced macroeconomic discipline, deregulation, and market openness as the foundation for development.
However, this approach also left a reliance on foreign capital and structural disparities between the central and regional governments.
Purbaya broke away from this orthodoxy. He recognized that macroeconomic stability should not be achieved at the expense of social equality and national self-sufficiency.
"Growth without equal distribution is merely statistics, not progress," became the spirit that reflected Purbaya's direction of fiscal and economic reform.
He viewed a market economy as requiring fair regulation, equitable redistribution, and an active state as the architect of development, not merely a referee.
Closer to Sumitro and Mubyarto in the context of Indonesian economic thought, Purbaya stands between two major figures: Sumitro Djojohadikusumo and Mubyarto. Like Sumitro, he emphasized the state's role in industrialization, fiscal self-sufficiency, and long-term innovation-based development.
However, the spirit of his policies also reflected Mubyarto's populist spirit, which positioned the economy as a means to achieve social justice and public welfare.
However, this approach also left a reliance on foreign capital and structural disparities between the central and regional governments.
Purbaya understood that national prosperity can be measured not only by GDP growth, but also by equitable access to education, health care, and productive employment.
This approach made Purbaya a moral technocrat, who sought to return development to constitutional ideals:
"The prosperity of the people is the highest economic law."
