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Lore & Background

In the mid-1950s, the economists who would become the Berkeley Mafia were students at the Faculty of Economics at the University of Indonesia (FEUI). The faculty was headed by Sumitro Djojohadikusumo. As tensions grew between Indonesia and the Dutch government over West Irian, Dutch lecturers began to leave. Sumitro turned to the Ford Foundation, which began a process by which FEUI students were chosen to undertake overseas studies at the University of California, Berkeley.

The overseas studies program began in 1957. By the early 1960s, all of the students who had been sent abroad had returned from Berkeley and had begun taking up positions as lecturers at the Army Staff and Command College (SESKOAD). In 1966, General Suharto took over executive control in Indonesia from President Sukarno by virtue of Supersemar. In late August 1966, Suharto held a seminar at SESKOAD; the FEUI economists, headed by Widjojo Nitisastro, attended.

Their presentation impressed Suharto, who invited them to begin work as a team of experts. Sumitro Djojohadikusumo was often called the 'Godfather of Indonesian economists', a title he disliked.

Reader's Guide

The program also aimed at rehabilitation of infrastructure and development of the agricultural sector. An international program to support economic recovery was established under the Inter-Governmental Group on Indonesia. After Suharto became president in 1968, the members were appointed to ministerial and senior advisory posts. The group had great influence on economic policy and brought Indonesia's economy to an unprecedented growth period, averaging around 6.5% per year between the late 1960s and 1997.

The Berkeley Mafia's liberal approach encountered opposition from generals such as Ali Murtopo, Ibnu Sutowo and Ali Sadikin, and from groups like Hizb ut-Tahrir. With the oil boom in the mid-1970s, Suharto favored economic nationalists and the Berkeley Mafia's influence was restricted. Suharto turned to them again in the mid-1980s when oil prices dropped; they presided over liberalization and deregulation. They again encountered opposition from Sudharmono, Ginandjar Kartasasmita, and BJ Habibie.

During the 1997 Asian financial crisis, people blamed the Berkeley Mafia. During the Reform era, only Widjojo was retained in the government.

Did You Know?

• The group included Widjojo Nitisastro, Mohammad Sadli, Emil Salim, J. B. Sumarlin, and Ali Wardhana. Dorodjatun Kuntjoro-Jakti is also sometimes included.
• While sharing many similarities with the Chicago Boys in Chile, the Berkeley Mafia was not considered to be neoliberal unlike the former.
• Out of the Berkeley Mafia, only Widjojo Nitisastro and Emil Salim continued to have significant influence in government during the post-Suharto Reform era.
• As of today, Emil Salim and Dorodjatun Kuntjoro-Jakti are two surviving members of the Berkeley Mafia.