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$Unique_ID{bob00203}
$Pretitle{}
$Title{Indonesia
Introduction}
$Subtitle{}
$Author{Frederica M. Bunge}
$Affiliation{HQ, Department of the Army}
$Subject{political
indonesian
sukarno
economic
early
military
percent
indonesia
soeharto
dutch}
$Date{1982}
$Log{}
Title:       Indonesia
Book:        Indonesia, A Country Study
Author:      Frederica M. Bunge
Affiliation: HQ, Department of the Army
Date:        1982

Introduction

     A banner strung from the talons of a mythical golden eagle proclaims
Indonesia's national motto, "Unity in Diversity." Its message evokes a
persistent theme in the history of the archipelago, emphasizing a spirit of
unity fostered in the face of multiple and often conflicting cultural and
religious traditions. The phrase was coined in the fifteenth century under the
Majapahit empire on the island of Java, which at its height encompassed nearly
all of modern Indonesia and other parts of Southeast Asia, and whose
civilization blended Javanese mysticism with Hindu, Buddhist, and Islamic
elements. Nonetheless, it remained as apt for contemporary Indonesia as it was
for the kingdom of long ago.

     The preeminence of the Javanese in Indonesian society has continued over
the centuries. Concentrated in central and eastern Java, they constituted over
half the country's population-estimated at more than 150 million in early
1983; their influence in cultural, economic, political, and military affairs
was paramount. Unity in modern Indonesia means unity in a Javanese context.

     Beyond this, however, social divisions have carried over into the modern
period often as destabilizing forces rather than as forces for cohesion.
Religious adherence, as well as ethnic and regional ties, creates major fault
lines in the society. Fragmentation arises from differences in language and
tradition among the 10 or so major ethnic groups and the approximately 300
smaller groups. A major cleavage distinguishes the foregoing indigenous
peoples from an important Chinese minority-widely resented for the
economically advantaged position it acquired under Dutch rule in the
nineteenth century and in the time since then. Equally serious in their
political implications are cleavages arising from religious differences. Some
90 percent of the population is Muslim, but this seeming uniformity obscures
wide variations in individual spiritual expression and degree of commitment to
Islam. The vast majority of Indonesians are nominal Muslims-eclectic in their
spiritual beliefs and practices. The orthodox element constitutes only a
small minority, and even it is divided, a fanatic fringe seeking the
establishment of a truly Islamic state.

     Economic disparities compound the social complexities. Rural poverty has
proved an enduring problem, linked as it is to spiraling population growth,
which creates increasing scarcities and fragmentation of land-notably on Java.
Having less than 7 percent of the land, Java has about 63 percent of the
population-an estimated 93 million or more inhabitants in early 1983 (see fig.
1). The Dutch colonial administration tried resettling Javanese on other
islands, as have subsequent Indonesian administrations. Even after
independence, however, under both presidents Sukarno and Soeharto-despite a
relatively smooth-working family planning program-population increases have
continued to outdistance the rate at which employment opportunities could be
generated. Under Soeharto, the standard of living has improved. Yet there has
been little discernible progress in narrowing the gap separating the tens of
millions of painfully poor rural inhabitants and urban migrants from Jakarta's
wealthy elite, many of whom have a massed large fortunes, a few by
unprincipled or fraudulent, if not clearly illegal, means.

     The ultimate source of this wealth lies in the nation's natural
resources, which are rich and varied, in keeping with the vastness of the
Indonesian archipelago and the diversity of its terrain. By the early 1980s,
for example, Indonesia had become the number one producer of tropical
hardwoods, although conservation measures since then may have affected this
position. Its tropical rain forest, Asia's largest, represented one-tenth of
the total global resources. The most valuable resource, however, was oil,
which by the late 1970s had come to provide almost 70 percent of the national
budget. In 1982 Indonesia was the world's eighth largest oil producer.
Important deposits of natural gas, nickel, copper, and tin also had
contributed to making the country an essential source of raw materials and a
major investment location for Japan and the United States. The introduction
of Western technology was rapidly creating a modern industrial sector.
Agriculture remained an important sector of the economy, even though its
contribution to national income had declined to 31 percent by 1980. Java's
volcanic soils had given rise to a tradition of irrigated rice farming and
tree-crop cultivation. Exports of commercial crops, such as rubber, palm oil,
tea, and tobacco, along with minerals produced important foreign exchange
earnings.

     The resources and produce of the archipelago had long attracted outside
interest. Early traders came from Persia, India, China, and elsewhere.
Competition for dominance of the lucrative Spice Islands (Maluku Islands)
trade after 1511 by Portuguese, Spanish, Dutch, and British interests
culminated eventually in Dutch hegemony over most of the archipelago. Portugal
was left with only a foothold on the island of Timor-east of Java and
Bali-while the Spanish retreated to the Philippines. The British eventually
settled for the Malay Peninsula, Singapore, and the northern portion of
Borneo. By the late nineteenth century, the Dutch had penetrated the interior
of Sumatra, implanted themselves on Borneo, Celebes (Sulawesi), and the
smaller islands of the eastern archipelago, and established an outpost on
western New Guinea. Increasing world demand for oil and rubber in the early
twentieth century left them well satisfied with their colonial territory.

     Among the Indonesians themselves, however, resentment of Dutch
exploitation and maladministration, particularly under the harsh Cultivation
System but even after the liberal reforms of the 1870s, contributed to the
development of an anticolonial movement. By 1919 a major politicoreligious
body, the Islamic Union (Sarekat Islam), had attracted 2.5 million members. A
rebellion in 1926 led by the Indonesian Communist Party (PKI), which at its
founding in 1920 had been Asia's first communist party, was crushed. Despite
the long years of detention suffered by many of its leaders, the independence
movement was ultimately to be successful. Best known among the leaders was
Sukarno, who after independence became Indonesia's first president. Although
more often imprisoned than free in the late 1920s and 1930s, Sukarno was able
to establish one of the largest revolutionary organizations, the Indonesian
Nationalist Party.

     Cooperating with occupying Japanese forces during World War II, despite
harsh conditions imposed on many of his compatriots, Sukarno was rewarded with
a promise of the country's eventual freedom. On August 17, 1945, in Jakarta,
he proclaimed Indonesian independence. Not unpredictably, independence forces
were wholly united in neither organization nor intent; instead they included
many localized groups identified with their own area or their own political
aspirations. Even as the struggle for independence continued-initially
supported by Allied Forces-factional elements under communist leadership
launched a counterrevolt against the Sukarno forces from Madiun in 1948. This
costly action was put down, and the fight continued against the colonial power
until 1949. Tiring of the long resistance and pressured by world opinion, the
Dutch at last fully confirmed Indonesian independence in December 1949.
Western New Guinea was not included in the original arrangement but came under
Indonesian administration in 1963 in consequence of a United Nations-sponsored
Act of Free Choice. After a plebiscite among local leaders in 1969, it was
absorbed as the twenty-sixth province, Irian Jaya.

     The political era of Sukarno fell into two broad periods: an interlude of
parliamentary democracy from 1950 to 1957, superseded by an increasingly
authoritarian regimen of Guided Democracy lasting until 1965. The major
objective was promotion of a spirit of Indonesian nationalism and unity, which
was carried on under the ideological banner of pancasila (see Glossary) and
the five principles embodied within it. Party politics proved fractious, the
economy failed to pick up significant momentum, and in the late 1950s
destabilizing regional rebellions and a "confrontation" with Malaysia
occurred. Senior officers of the armed forces (ABRI), as far back as the
independence struggle, had grown uneasy with these trends. From the mid-1950s
the military began enlarging its own political role. Its economic power base
was firmly established after the nationalization of Dutch holdings in 1957
when, under the self-arrogated dual functions (dwi fungsi) concept, ABRI
officers assumed the administration of a number of the newly
government-administered large enterprises.

     The reactivated PKI also expanded its role, strengthening its membership
with Sukarno's tolerance and encouragement. Whereas Sukarno had initially
drawn support from the Soviet Union, he now increasingly aligned himself with
China and indigenous Indonesian communists. Becoming less temperate and more
bombastic, and conceiving of himself as the great leader of the revolution
whose decrees were higher than legislation, he declared himself "President for
Life." Indonesian observers began to talk of a power triangle represented by
Sukarno, the PKI, and ABRI.

     The most significant event in modern Indonesian history occurred in late
1965. Six senior army generals were murdered in a coup attempt, was gradually
eased out of office, bringing an awkward end to asserting the need to protect
Sukarno, led Jakarta-based strategic forces against the insurgents,
forestalling the coup. Communist ranks were decimated in the ensuing months,
and massive reprisals were carried out against them and against persons
regarded as communist sympathizers. In a matter of months the army became the
most powerful political force in the nation. Hundreds of thousands of persons
died, and several hundred thousand others were taken into custody. Most were
released not long after, but some were imprisoned until 1979 or later and even
when released were required to report their whereabouts to the authorities.

     Sukarno, owing to strong suspicion of his complicity in the coup attempt,
was gradually eased out of office, bringing an awkward end to four decades of
leadership, throughout much of which his charismatic appeal had earned him
widespread popular support. Soeharto succeeded him in power, first as an
appointed acting president in 1967; a year later he was confirmed in office as
president.

     The tasks facing Soeharto were formidable. Among them were the problems
of restoring order and stability and of developing a popularly accepted
structure of rule compatible with indigenous traditions and values.
Additionally, there were problems of building momentum for growth in an
economy drained by maladministration and inflation under Sukarno and problems
of constraining population growth that compounded grass-roots poverty. As
always, national security was a consideration as well, but experience with
regional rebellions and the recent coup attempt left Soeharto more concerned
about domestically rooted subversion than about external security threats.

     Economic development replaced themes of revolution and nationalism as the
country entered a new stage in its history. Reversing Sukarno, Soeharto and
the New Order sought political support and economic aid from the West.
Mindful, too, of Dutch exploitation in the colonial period and of accusations
that during his rule Sukarno had sold out the country's patrimony to
foreigners, Soeharto's regime pledged itself to develop Indonesia's rich
resources for domestic rather than external benefit.

     As under Sukarno, great emphasis was given to forging national unity.
The key strategy in this regard was to shift attention away from economic and
religious cleavages. A number of smaller political parties were reorganized
into larger bodies under overarching principles. Thus, the Muslim parties were
merged into the Development Unity Party, and a nationalist-Christian alliance
was formed under the Indonesian Democratic Party. The government formed its
own umbrella political organization based on pancasila and its five
principles, which was a collection of functional groups of women, labor, and
youth crosscutting traditional lines of social division. All civil servants
were obliged to join this organization, known as Golkar, thus creating a close
alliance between Soeharto and the bureaucracy.

     By early 1983 Soeharto had been in power some 16 years and, despite
intermittent domestic and foreign criticism, his position in early 1983
appeared unassailable. Backed by the military, he was elected to the
presidency for a five-year term in 1973 and again in 1978, and he was to stand
for another term in March 1983.

     The military remained the main arbiters of power, the balance of power
within ABRI being retained by the Generation of 1945 (those who had fought the
independence struggle), but rising influence was accruing to the Academy
Generation. Backed by a powerful security apparatus, whose best known arm was
the Operational Command for the Restoration of Security and Order (Kopkamtib),
the military's primary mission was to maintain internal stability. In this it
has proved highly effective. Kopkamtib's wide-ranging authority extends over a
vast physical territory and deep into the society. In addition to directing
operations against politically subversive groups and individuals, for example,
Kopkamtib screens political candidates, monitors press and publications, and
counsels various government departments, such as that for manpower and
transmigration (see Glossary), whose activities could involve them indirectly
or inadvertently in public security matters. Because the dwi fungsi concept
continued to obtain, the military was a strong presence in the socioeconomic
realm as well. Occupying positions at all levels in the civilian bureaucracy,
administering extrabudgetary enterprises, serving as appointed members of the
People's Consultative Assembly and in the cabinet, ABRI officers exerted a
heavy influence on national affairs.

     Members of the Chinese minority were largely excluded from political
life, in contrast to their position under Sukarno but, like the military,
played an important economic role. They were significant especially in the
private sector, working closely with the military and the bureaucracy in
export trade. Because of their relative prosperity, Chinese were often
targets of ethnic antagonism, and Chinese rioting has occurred several times
in the past decade. The destabilizing potential of this problem began to be
apparent as early as 1974, with the result that the government issued various
directives to promote the interests of indigenous entrepreneurs not only
vis-a-vis the Chinese but also in relation to non-Chinese foreigners.

     The economic successes of the New Order have contributed substantially to
its longevity. According to a number of observers, benefits had reached down
from the top to people on many levels, improving the general standard of
living and access to social services. A competent team of Western-trained
economists had reduced budget deficits to zero as a percentage of
expenditures, reduced inflation from 600 percent to 10 percent from 1965 to
1968, and positioned the economy to benefit from the favorable international
situation of the 1970s. In the 1970s per capita production expanded by over 5
percent per year, stimulated by rising oil revenues channeled into public
investment. Economic growth rates of nearly 10 percent in 1980 and of 7.6
percent in 1981 were achieved.

     Foreign aid, loans, and investment underwrote much of this progress.
Grants, grant equivalents in publicly guaranteed loans, and net direct private
investment totaled more than US$6 billion in the 1965-81 period. Japan, the
United States, and multilateral agencies, which made up a consortium of
industrial democracies called the Inter-Governmental Group on Indonesia, were
the chief sources of funds. As of 1981, however, grant aid as a percentage of
imports was declining, and direct foreign investment, experiencing various
government-imposed constraints, was diminishing.

     By early 1983 Indonesia's economy was reacting more strongly to the world
recession than had been earlier predicted. Oil production was down by 20
percent from the previous year, and non-oil exports of rubber, tin, and coffee
had fallen off even more drastically. Drought had adversely affected
aspirations to self-sufficiency in rice production, and the prospect of having
to finance more rice imports became increasingly real.

     Other problems in the economic realm, some of them inherited from the
Sukarno era or earlier, persisted. Not the least of these was that of
continued population increases, the consequences of which were particularly
hard on the poorer elements of society. Ambitious development programs tended
to focus on capital-intensive projects rather than those that might create a
greater number of job opportunities. According to the World Bank (see
Glossary), Indonesia could be expected to have a population of 214 million by
the year 2000. Improvements in income levels and access to social services
would become more and more difficult to provide, even as the impact of
industrialization weakened traditional support structures. It was in this
context that allegations of corruption on an extensive scale involving members
of Soeharto's ruling group and the checkered financial histories of Pertamina
and other public enterprises appeared in their worst light.

     There was clear evidence of government concern in these areas, however.
A commission had been established to look into allegations of graft and
abuse. More importantly, the announced goals of the third five-year plan,
Repelita III, specifically addressed the question of social justice. Family
planning operations-population increases notwithstanding-had been relatively
effective, and much effort was being put into the transmigration program,
designed to relieve population pressures on Java.

     Military and security forces left no stone unturned to limit the
potential for disorder and unrest, and opposition outlets for the expression
of opposing political viewpoints were severely restricted. Not only were
political parties in disarray, but constraints on the media also effectively
limited criticism. This was amply illustrated by the absence of attention in
the press to the "Petition 50" drawn up in 1980 by leading opposition
spokesmen, which sharply criticized what it saw as an increasingly
authoritarian trend linked with a continuing, rather than diminishing, role
in public affairs for the military and a narrowing of political freedoms.
Although some, retired military officers, students, intellectuals, or others
who had backed the military in 1965 were disappointed with the aspects of the
New Order, from the viewpoint of the leadership, orthodox Islam was probably
seen as the only serious opposition political force.

     For years the leadership had been extolling pancasila and its five
principles as the nation's prevailing ideology and philosophical centerpiece.
Addressing Indonesians from all walks of life and of all religious
persuasions, it had called for unyielding adherence to the five principles as
enunciated in the 1945 Constitution. "For us," Soeharto was quoted as
saying, "the five principles are a matter of life or death." Latent fears that
Muslim or other extremists not unreservedly committed to pancasila might
threaten political stability seemed indicated by rumors in early 1983 that
the leadership was seeking ways to make even more stringent the requirement
that all political parties express absolute and unqualified adherence to the
national ideology.

     On an everyday basis traditional Javanese attitudes and values continued
to manifest themselves in the political process. Many leading political
figures were said to prefer dealing by consensus, a reflection of
long-standing Javanese emphasis on harmony. The continued profound influence
of Javanese mystical belief was evident as well in the tendency of Indonesian
leaders to reinforce their legitimacy by identifying with heroes of wayang
(see Glossary) drama. Thus, the deeply spiritual Soeharto drew strength by
visiting the alleged dwelling place of Semar, the clown god of wayang
drama, to whom he likened himself, and the government could not lightly
dismiss the mystic who in 1976 announced himself as Indonesia's new "just
prince" and was subsequently imprisoned for plotting against the president.

     In the realm of foreign policy, Indonesia sought to promote regional
cooperation through the Association of Southeast Asian Nations, dominated
by the search for a solution to the problem of Kampuchea. It was one of the
founders of the nonaligned movement and was a participating member of the
Islamic Conference, an association of Islamic states. It sought to promote
regional peace and, apart from boundary matters, had no urgent problems with
immediate neighbors. Because of Beijing's suspected complicity in the 1965
coup, Indonesia did not maintain formal relations with China as of early 1983.

     An Indonesian venture into Portuguese Timor in 1975 and the ultimate
absorption of the area as Indonesia's twenty-seventh province-East
Timor-prompting fears that a leftist beachhead might be established
there-were ill received in many circles abroad. In 1982 criticism surfaced
both in the United States Congress and in the Australian legislature as
reports of famine and civil rights abuses continued to circulate. The
Indonesian government issued strong denials, but restrictions on travel
prevented broadly based verification.

     As the time of the March 1983 elections drew near, Soeharto enjoyed
support at many levels in the population, and there seemed little doubt that
he would win reelection. The strength of Golkar, the weakness of the
opposition, and the significant economic strides made over the long term-even
if the immediate economic picture looked somewhat less favorable-worked in
favor of the man who had managed to maintain cohesion in Indonesia's
fragmented society for more than a decade and a half.

Frederica M. Bunge
January 1983