THE POTENTIAL ECONOMIC LOSS OF 1965-66 COMMUNIST MASSACRE: LESSONS FROM CENTRAL JAVA AND EAST JAVA
Ash-Shidqi, Muhammad Hazmi
The 1965-66 communist massacre is a sensitive and traumatic issue in Indonesia until today. The issue is covered under the September 30th, 1965 movement shadow, which is recognized as one of Indonesia's failed coup d’état attempts since the independence era. Approximately 500,000 deaths are estimated from this massacre, especially in Java, Bali, and North Sumatra. This research focuses on what happens to regional economic loss because of the 1965-66 communist massacre. I use the deterministic interpolation method from Indonesia census data to estimate the number of victims in 1965-66 communist massacres at the regency/city level and then use it to determine the impact of the 1965-66 communist massacre on economic performance from especially in the manufacturing sector by using Indonesia annual manufacturing survey data. By focusing the study on the two most significant sources of the communist base in the 1960s, Central Java and East Java, and using 2SLS regression estimation, I found that there is a positive relationship between population loss in 1965-66 communist massacre and regional economic loss, and the impact is even more significant when the new-order regime was still in power. Total potential output loss from 1965-66 communist massacre in Central Java and East Java for 27 years (from 1988-2015) are estimated up to 1.188 trillion USD (constant value 2010). We also find that the 1965-66 estimated population loss only spatially clustered Central Java, while 1988-2015 potential economic loss is spatially random in Central Java and East Java.
communist; economic; massacre; regional; spatial
M.S., Regional Science
Master of Science
dissertation or thesis