Origins of The Group
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, an economist who had served as Minister of Trade and Industry and Minister of Finance for the Government. Sumitro, being the only teacher with an economics doctorate had to turn to foreign lecturers from Netherlands and lecturers from other faculties to assist in educating the students at FEUI.
As tensions grew between Indonesia and the Dutch Government over West Irian (now known as West Papua), Dutch lecturers began to leave the country. Sumitro turned to the Ford Foundation for assistance. The Ford Foundation then began a process where students from the FEUI were chosen to undertake overseas studies at the University of California, Berkeley. After the Ford Foundation conducted some preliminary preparations, 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. Although he would not formally become president for another two years, Suharto began laying down the foundations for what would become the New Order regime. In late August 1966, Suharto held a seminar at SESKOAD to discuss political and economic matters and the way in which the New Order would approach these problems. The FEUI economists, headed by Widjojo Nitisastro attended the seminar.
During the seminar the economists set out their ideas and policy recommendations. The presentation impressed Suharto who invited them to begin work as a team of experts in the field of economics and finance.
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