The 'Colonial Drain' from Indonesia, 1823-1990

Abstract

Common perception dictates that "colonial exploitation' impeded economic advance in developing economies. This paper uses historical balance of payments and national income data for Indonesia to approximate "colonial drain'. The paper concludes that most of the funds flowing out of the country were payments for the services of foreign labour and investment capital in Indonesia. Even using the broadest possible definition of "drain' the historical path of economic growth in Indonesia is not reversed. In fact, the "drain' was most substantial during two periods of accelerated growth, 1900-29 and 1967-90. -from Author