Abstract

This dissertation is intended to answer the question of whether it is possible
for a developing nation to achieve economic prosperity without compromising
equality and liberty. Theories of socio-economic development must often deal with
conflicting demands of economic efficiency, political freedom, and socio-economic
equality, as well as the frequently-contradictory aims of material prosperity and
spiritual happiness. I argue that an analysis of the political, economic, and religious
thought of Sjafruddin Prawiranegara, a leader of the Masyumi Islamic political party
in Indonesia and a neglected liberal-modernist Muslim thinker, allows us to explore
how these seemingly conflicting demands may be harmonized into an integrated
concept of development. An examination of Sjafruddin’s works—reports, books,
articles, speeches, and interviews from 1946 to 1983, as well as other scholars’
observations, judgments and reports—reveals a prescription for Indonesian economic
problems based on two key guiding principles of development: social justice and
human development. The basis of Sjafruddin’s economic rationality is the
prioritization of human development before capital. This ensures sustainable
economic development and nurtures a spiritually and morally-oriented population to
withstand the consumption practices and lifestyles of modern capitalism. This study
also suggests that economic development will be most successful if it occurs within
the framework of a modern conception of social justice predicated on a democratic
political system with a system of checks and balances between executive, legislative
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and judicative branches of government, equal opportunities, human rights, and
universal political participation. In the context of the Muslim world, this concept of
development requires the re-interpretation of Islamic teachings. The present study
seeks to contribute to the field of religious studies by highlighting the systematic
thought of an independently-minded Muslim modernist thinker whose contributions
are underappreciated in academic circles even in Indonesia. Sjafruddin’s unique
historical involvement during the 1950s as a politician who was directly involved in
the conception and implementation of economic policies, as well as his career as a
well-respected public intellectual, provide insight into both the promises and the
realities of development and social justice in a context where religion plays a major
role in the lives of the people.