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$Unique_ID{bob00220}
$Pretitle{}
$Title{Indonesia
Chapter 4D.   Regional Cooperation}
$Subtitle{}
$Author{Riga Adiwoso-Suprapto}
$Affiliation{HQ, Department of the Army}
$Subject{indonesia
asean
indonesian
soviet
states
united
economic
china
government
asia
see
pictures
see
figures
}
$Date{1982}
$Log{See President of Indonesia*0022001.scf
}
Title:       Indonesia
Book:        Indonesia, A Country Study
Author:      Riga Adiwoso-Suprapto
Affiliation: HQ, Department of the Army
Date:        1982

Chapter 4D.   Regional Cooperation

     ASEAN was formed in August 1967 by Indonesia, Malaysia, the Philippines,
Singapore, and Thailand, in response to a new regional political setting made
possible by the rise of the New Order in Indonesia. It has been a major
vehicle for cooperation among these countries-and for Indonesia, which played
a key role in ASEAN's birth, a cornerstone of its foreign policy. The regional
setup has made it possible for Indonesia to lend credibility to its pragmatic,
good neighbor policy. ASEAN is not, however, the country's first encounter
with the question of regionalism. In 1954 Sukarno declined membership in the
Southeast Asia Treaty Organization (SEATO) because of its pro-Western defense
treaty commitment. In 1961 he refused to join with Malaya, the Philippines,
and Thailand in forming the avowedly nonmilitary and nonpolitical Association
of Southeast Asia, because the latter two were SEATO members. In 1963,
however, he agreed with Malaya and the Philippines to launch a nonpolitical
grouping better known by its acronym MAPHILINDO (for Malaya, the Philippines,
Indonesia). The actual reason for joining this short-lived arrangement was to
obstruct or delay the establishment of the Federation of Malaysia, which
Sukarno had perceived as a British scheme to perpetuate its military presence
in Southeast Asia. After Malaysia became a reality in 1963, he countered with
confrontation" by initiating a so-called anti-imperialist Jakarta-Phnom
Penh-Hanoi-Beijing-P'yongyang axis (see The Transition to Guided Democracy,
ch. 1). This scheme failed to survive under Soeharto's new foreign policy
direction.

     ASEAN seeks to promote regional economic, social, cultural, and
technical advancement, which is compatible with the Soeharto government's own
development-oriented policy. The organization's endeavor is based on mutual
consultation and consensus, achieved through an annual ministerial conference
held in each of the member countries in alphabetical order. Indonesia's
active interest in regional cooperation and stability has been acknowledged by
other members in their selection of Jakarta as the permanent site of the
ASEAN Secretariat. This body coordinates the activities of the five
individual national secretariats, each known formally as the ASEAN National
Coordinating Agency.

     Although emphasizing the need for expanded economic links regionally,
Indonesia has maintained that it would neither join any collective security
entity nor become involved in major power conflicts. It has shared the rising
concern of other member states about the uncertain future of southeast Asian
security, given a series of disquieting developments since the late 1960s.
These included the British plan, disclosed in January 1968, to phase out its
military units east of Suez by the end of 1971; President Richard Nixon's
statement in July 1969 indicating a possible lowering of the United States
military profile in Asia; the startling thaw in the frosty Sino-American
relations in early 1971; the equally dramatic disclosure of the forthcoming
Nixon visit to China in 1972; and China's diplomatic gain in the United
Nations (UN) in October 1971 when it was seated in the organization in place
of Taiwan.

     Indonesian reaction was one of measured restraint. In early 1968 it
refrained from backing the Philippine suggestion for a regional defense
arrangement against China and in June 1969 did not endorse the Soviet
proposal for an Asian collective security system on the grounds that this
question should be addressed regionally, without outside influence. The
Indonesian thinking was that the countries of the region should be able to
fend for themselves if they are economically strong individually and
collectively. In November 1971 Indonesia-along with other ASEAN members-fully
backed the Malaysian proposal for the neutralization of Southeast Asia,
Jakarta pledging necessary efforts "to secure the recognition of, and respect
for, Southeast Asia as a Zone of Peace, Freedom, and Neutrality (Zopfan), free
from any form or manner of interference by outside powers."

     For years, despite the annual public display of solidarity expressed by
the five ASEAN foreign ministers, the organization had actually lacked a clear
focus of unity-at least until the 1975 communist victories in Indochina. Since
that time the looming specter of a dominant, expansionist Vietnam backed by
the Soviet Union has given ASEAN a compelling cause for a united front-the
need for a credible demonstration of political will to bury their petty
differences and forge a consensus on how to cope with the Indochinese
developments.

     Against this backdrop of "the greatest sense of urgency" was held ASEAN's
first summit, in Bali in February 1976. The five heads of state and government
gathered there signed a treaty of amity and cooperation, pledging their
"active cooperation in the economic, social, and cultural, technical,
scientific, and administrative fields." They also signed a document called the
Declaration of Concord, which laid down guidelines for political, economic,
social, cultural cooperation-and a long-term framework for complementary
industrial ventures and for the establishment of preferential trade
arrangements within the region.

     The real test of ASEAN solidarity and cooperation came with the
Vietnamese invasion of Democratic Kampuchea (Cambodia) under the Khmer Rouge
regime of Pol Pot and incursions into Thailand in June 1980. These actions
were perceived in Jakarta and in other ASEAN capitals to be not only a direct
threat to the "front-line state" of Thailand but also an affront to the ASEAN
concept of Zopfan. The disturbing implications of intensified Sino-Soviet
rivalry in Southeast Asia were not lost on ASEAN member states in that the
Socialist Republic of Vietnam (the new name adopted in 1976 upon the
reunification of the two Vietnams) was backed by the Soviet Union, whereas the
ousted Pol Pot regime had Chinese support. Moreover, the Vietnamese actions
came to pose a worrisome question of the nature of the principal external
threat to ASEAN. Generally, observers have suggested that Thailand and
Singapore are more concerned about a Soviet and Vietnamese threat, whereas
Indonesia and Malaysia have more reason to suspect China.

     As it turned out, ASEAN was united in demanding the withdrawal of some
200,000 Vietnamese troops from Kampuchea and in refusing to recognize the Heng
Samrin regime installed by Hanoi in place of the Khmer Rouge regime of Pol
Pot, which the UN had recognized as legitimate before the Vietnamese invasion.
In view of the widely condemned Khmer Rouge atrocities and repression,
Indonesia and other ASEAN states drew a legalistic distinction, asserting that
their support was for the state of "Democratic Kampuchea." ASEAN's response
has also taken another form-in urging three disparate Kampuchean resistance
factions to form a coalition against the Heng Samrin regime; this effort bore
fruit in June 1982 when a united front was formed by the Khmer Rouge leader
Khieu Samphan, former prime minister Son Sann, and former head of state Prince
Norodom Sihanouk. The Indonesian position has been that such a coalition would
be "a necessary part of our efforts in the search for a political solution,"
which it has maintained is preferable to a military solution. Material or
military support to the coalition has been a matter to be left to the
discretion, according to Jakarta, of "each ASEAN or non-ASEAN country."

     The Soeharto leadership has remained convinced that ASEAN's peacemaking
role with respect to Kampuchea depends heavily on its dissociation with any
action that could be construed as hostile to Vietnam or as taking sides in a
major power rivalry. Its posture was perhaps best reflected in the July 30,
1980, editorial of the English-language Indonesian Times published in Jakarta:
"If [the policy of diplomatic and economic pressure against Hanoi] creates
more fear in Vietnam of the PRC's threat and suspicion of the United States
and ASEAN's motive, it will serve no purpose ... ASEAN will have to be
extremely careful so as not to create the impression that it is a mere camp
follower of the United States or even of the PRC. ASEAN must not only preserve
its identity, but also display it while tackling the Kampuchean question and
conducting dialogues and diplomacy with Vietnam."

     Rightly or wrongly, Jakarta's position has been characterized as dovish.
In 1982 it was open to question whether the political and psychological
distance separating Indonesia and its ASEAN neighbors from Hanoi could be
narrowed in the foreseeable future. Vietnamese sources continued to maintain
that the Kampuchean problem was of no concern to ASEAN and that ASEAN was, in
fact, aiding and abetting Chinese expansionism in Southeast Asia by supporting
Kampuchea and, worse, by giving aid to the "tripartite coalition government."
On June 12, 1982, Radio Hanoi stated authoritatively that "Kampuchea is a
problem between Chinese expansionists and the Indochinese countries, not
between Indonesia and ASEAN."

     In 1982 the Soeharto administration acknowledged that the existing
regional climate was not hospitable to the concept of Zopfan and that the pace
of progress in ASEAN cooperation fell short of expectations. One way to
reinvigorate ASEAN, according to Jakarta, would be to shift ASEAN's structure
and decisionmaking from its current "loose and decentralized" pattern to "a
more centralized one." A modest beginning would be to give the ASEAN
Secretariat more responsibility for coordination and direction-away from the
current, poorly coordinated pattern of cooperation through individual national
secretariats.

     Regionally, relations with Australia, the largest non-ASEAN neighbor,
were improving. A member of the Inter-Governmental Group on Indonesia (IGGI),
Australia has taken an active interest in the evolution of Indonesia as an
economically viable and politically stable neighbor. It has also shared
Indonesia's concern for security in Southeast Asia by periodically holding
joint naval exercises with Indonesia since 1972. Relations were strained
briefly after the Indonesian invasion and subsequent annexation of East Timor,
especially after March 1977 when a former Australian consul in East Timor
publicly claimed that there had been Indonesian atrocities in East Timor in
the 1975-76 period. Apparently, the Soeharto government believed that such a
public claim could not have been made without the full knowledge and blessing
of the Australian government. The touchy issue was defused somewhat after
January 1978, when Australia gave full recognition to the Indonesian
incorporation of East Timor. Nevertheless, the Australian media, mostly
privately owned, remained critical of the means by which annexation was
achieved-a source of continuing irritation in Jakarta. In April 1981
Australia's new ambassador to Indonesia, Rawdon Dalrymple, stated in Jakarta
that the close relationship between the two countries offered many
opportunities, adding that the increasing flow of tourists, businessmen, and
students between them should be encouraged.

Major Powers

     Indonesia has combined pragmatism, caution, and realism in dealing with
the United States, the Soviet Union, China, and Japan. The promotion of
economic linkages on a mutually beneficial basis remains the critical
determinant of relations. Jakarta has consistently expressed its determination
not to become embroiled in the complications of major power competition for
regional and global influence.

     Relations with the United States were cordial during the first years of
Indonesian independence but showed strains after the mid-1950s. As the
principal imperialist villain in Sukarno's xenophobic perception, the United
States came to be distrusted for its failure to back his effort to gain
control of Irian Jaya, for its alleged role as the major source of outside
support in a regional armed insurrection in 1958, and for its military
alliance with the Netherlands through the North Atlantic Treaty Organization
(NATO) at a time when Indonesia and the Dutch were on hostile terms (see the
Transition to Guided Democracy, ch. 1). The United States policy of extending
only a limited amount of economic and military assistance to Indonesia during
the 1963-65 period of confrontation further antagonized Sukarno.

     Soeharto's assumption of power in March 1966 brought a shift, however,
given the convergence of interests on both sides to see the development of a
stable political and economic order in Indonesia. In April 1966 the United
States offered to resume economic assistance. It also played a leading role in
the formation in February 1967 of an international aid consortium, the IGGI,
through which it has funneled a substantial contribution in support of
Indonesian development programs. From 1967 to 1974 one-third of Indonesia's
bilateral aid requests were provided by the United States on relatively soft
terms through the IGGI. The one-third formula was dropped in 1975, but in the
early 1980s the United States continued to be a major bilateral aid donor
along with Japan, Canada, and the Netherlands. The United States in 1980 was
Indonesia's second most important trading partner with a two-way commodity
trade of US$5.7 billion. In addition, it maintained substantial economic links
through multinational corporations in the Indonesian oil and non-oil sectors.

     In the early 1980s the United States had no security agreement with
Indonesia but continued as a major arms supplier. The latter has been quick to
point out that procuring military supplies from and maintaining friendly ties
with Washington does not contradict its independent and active foreign policy
inasmuch as Indonesia is not politically or militarily beholden to Washington.
In any case, relations with the United States were close in the early 1980s,
even though there were points of differences. The Soeharto government made
known its unhappiness with the United States policy of releasing its tin
stockpile in the world market from time to time, a policy that adversely
affected Indonesian tin exports. Another discord was related to the United
States reluctance to endorse the Indonesian position that an archipelagic
state should have full jurisdiction over the waters of the archipelago. The
two countries appeared also to have a differing perception of China as a
source of threat to Southeast Asia. The Soeharto government has taken the view
that the United States has underestimated the real nature of the Chinese
threat and that its policy of multifaceted cooperation with China has been
detrimental to ASEAN security.

     Indonesia has been realistic, however, in recognizing the beneficial and
stabilizing influence the United States military and economic presence has
continued to have, not only for Indonesia but also for other noncommunist
nations in Asia. The United States presence has been seen as critical to the
continuing need to have the balance of power maintained in Southeast Asia.
This view stems from the recognition that the Soviet Union and China are part
of the realities of a major power configuration and that the only effective
counterweight to the Soviet and Chinese designs on the region could be
provided by the United States and Japan.

     Relations with the United States were strengthened in October 1982, when
Soeharto visited Washington for an exchange of views with President Ronald
Reagan on issues of common interest. At that time Reagan stated that Indonesia
had not only brought credit to the concept of "genuine, constructive
nonalignment" but also had been "an important force for peace, stability, and
progress." He also used the occasion to announce the nomination of Assistant
Secretary of State for East Asia and Pacific Affairs John H. Holdridge as
ambassador to Indonesia.

     Relations with the Soviet Union were cordial in the 1954-65 period,
during which time the Soviets befriended Sukarno by granting long-term,
low-interest credits and supplying arms when the Western powers were not
disposed to do so. Moscow was quite effective in diplomacy and propaganda,
identifying with Sukarno's anticolonial, anti-imperialist, and anti-American
line. Relations turned sour after the abortive communist coup in 1965 but were
not suspended because China, not the Soviet Union, was blamed for
masterminding the coup attempt. Amid mounting mutual recriminations, the
extensive Soviet aid projects were either suspended or drastically curtailed,
and bilateral trade came to a virtual halt. Jakarta's major creditor at the
time, the Soviet Union, accounted for about 40 percent of the total Indonesian
foreign debt, estimated at the equivalent of US$2.2 billion.

[See President of Indonesia: General Soeharto Courtesy Government of Indonesia]

     The Soviet posture became less frigid in 1969 when Moscow hinted at the
possibility of resuming aid to Indonesia. The overture was timed apparently
to coincide with Moscow's broader policy of containing China in Asia,
initiated in June of that year in the form of a proposed Asian regional
collective system. It would have been to Soviet advantage if Indonesia and
other ASEAN states had accepted the proposal, which many observers at the time
labeled an anti-Chinese scheme. In any event, Indonesia responded negatively,
but in 1970 the Indonesian and Soviet negotiators agreed on a new schedule for
debt repayment-a schedule that was similar to the ones Indonesia had earlier
signed with Western creditor nations and Japan. Economic and trade relations
resumed in 1971, parliamentary missions were exchanged in 1974, and in 1975
an offer of new aid was made by Moscow. In 1979 a Soviet industrial and trade
fair was staged in Jakarta and Indonesia sent a parliamentary goodwill mission
to Moscow. Despite these signs of improvement, economic relations were
insignificant compared with those Indonesia had with Western nations. In 1980,
for example, trade turnover was only about US$93 million; the 1981 total
showed an increase to US$121 million.

     In the early 1980s the suspicion each had of the other's intentions had
yet to be laid to rest. The Soviet dissatisfaction with what it perceived to
be Soeharto's one-sided dependence on Western economic and military assistance
has been muted, evidently for political reasons involving China. Publicly,
Moscow has continued to assert that there is not a single obstacle that might
hamper cooperation with Indonesia and other ASEAN states. It appears also that
the Soviet Union wants to see China prevented from reestablishing official
contacts with Indonesia by playing on the latter's traditional fear of China.
In Soviet propaganda aimed at the Indonesian and other ASEAN audiences, a
salient theme has been the contention that China, not Vietnam, posed the
principal threat to ASEAN security.

     The Soviet Union has been distrusted for its potential if not actual,
role as a major foreign base of support for the revival of the defunct PKI.
This is because Moscow is reportedly providing shelter to some of the former
Indonesian communists who had quit China in the early 1970s in disgust over
China's conciliatory attitude toward the Soeharto government. They had
initially settled in Beijing but had become disenchanted with China and moved
on to Moscow, where the anti-Soeharto line was regarded as more to their
liking. The Indonesian authorities have been ever concerned about the
possibility that the communist expatriates in Moscow might seek to reestablish
contact with their numbers inside Indonesia, directly or through Soviet
nationals stationed in Jakarta and elsewhere. Whether the Soviets might have
any serious intention to resurrect communism in Indonesia is difficult to
ascertain, but it is a matter of record that the Soeharto government has taken
exception to Radio Moscow's occasional sympathetic broadcast references to
the PKI since the late 1970s. Furthermore, the oversized Soviet embassy in
Jakarta-the largest of all foreign embassies there-with its 40 diplomats and
some 100 "maintenance officers" has worried the authorities, particularly
in light of the limited extent of trade, cultural, and other links between
the two countries. In early 1982 the security authorities announced the
uncovering of a Soviet spy ring and expelled a military attache and an
Aeroflot official on charges of espionage.

     The Indonesians also have been worried about the growing Soviet military
profile in Asia, as evidenced in the Soviet access to docking facilities at
Da Nang and Cam Ranh Bay in Vietnam, the invasion of Afghanistan, and the
Soviet naval presence in the Indian Ocean. These have occasioned probing
questions in Jakarta of whether Moscow or Beijing posed the greater security
threat and whether Indonesia should normalize relations with China to balance
Soviet power.

     Apprehensions over subversive potential have remained as much a factor
in Jakarta's stance toward China as toward the Soviet Union-perhaps even
more so in the Chinese case. In 1982 the Soeharto government continued its
on-again, off-again attitude of deliberate ambiguity, tempered by caution,
toward the question of restoring official relations with China-frozen since
1967 owing to China's suspected complicity in the 1965 communist coup
attempt. In 1982 official ties were yet to be normalized because of
Indonesian uncertainty about the effect that the resumption might have on its
domestic politics and regional affairs.

     The post-1965 mutual hostility had been toned down somewhat by 1971. In
1973 the Chinese and Indonesian foreign ministers held informal discussions
in Paris about possible resumption of relations-a source of great dismay
and anger to some of the Indonesian communist stalwarts then residing in
Beijing. These ministers expressed the desire for renewed official contacts,
but not much happened until 1977 when Indonesia sent its first trade mission
and a badminton team to China. These informal and other "private" contacts
have increased since then, so that by 1980 the two countries had traded with
each other through third parties to the extent of some US$200 million.

     The difficulty of an early political reconciliation has been rooted in
the lingering anti-Chinese sentiments found not only among more devout
Muslims but also among senior defense and security officials. These sentiments
are sustained by a combination of factors, including the traditional popular
dislike of the unassimilable and small, but economically powerful, Chinese
minority at home; the presence in China of former Indonesian communist
leaders who had survived the purge and slaughter of the 1965-66 period;
China's ambiguity on the question of aiding underground communist rebels in
Southeast Asia; and official, as well as grass-roots, apprehensions about the
"loyalty" of some Chinese residents in Indonesia.

     In June 1982 the government reaffirmed, as it had done frequently, its
"readiness" to normalize relations with China but continued to mention
"a number of problems such as fears of infiltration and subversion" as main
stumbling blocks to any breakthrough "at this time." The official view in
late 1982 was that benefits accruing from the resumption of relations were
still outweighed by liabilities and that Jakarta would wait for "the right
moment" to act. Judging from official statements, another key policy
consideration was whether the normalization would promote or hinder ASEAN
stability in light of the intense Sino-Soviet rivalry by proxy in
Indochina-the Chinese through the Khmer Rouge resistance and the Soviets
through Vietnam and the Heng Samrin regime in Kampuchea. Jakarta's cautious
approach in 1982 was still dictated by the same note of uncertainty that had
prevailed, for example, in October 1979, when a parliamentary member publicly
remarked: "Although we face the bear, we should not invite the dragon."

     Limited cooperation with Japan during the Sukarno era has taken a
dramatic turn since 1966. By 1973 Japan had emerged as the major foreign
economic power in Indonesia-principal supplier and market as well as the
main source of capital assistance and technology. Its success has not gone
unresented, however, because of the bad reputation that Japanese businessmen
had earned as profit-hungry, sharp bargainers, to say nothing of the
Japanese government's developmental assistance that had tended to focus on
consumer-oriented projects. Japan had become suspected of practicing a
colonial pattern of exploitation. It became a major target of rising
economic nationalism as manifest in January 1974, when many thousands of
students staged riots in Jakarta against the visiting Japanese Prime Minister
Tanaka Kakuei-against what they charged was Japan's ruthless economic
diplomacy.

     The riots had repercussions. On January 27, 1974, Japan agreed in
principle to undertake the massive Asahan aluminum refinery project, for which
it had first expressed interest in 1972. The agreement was formalized in July
1975 during Soeharto's visit to Tokyo. Japan also responded by reducing its
investment in extractive industries and timber but retained its commitment to
develop oil and gas resources jointly with Indonesia. Apart from its
contribution through the IGGI, its direct assistance has been steadily
increased in support of Jakarta's developmental programs. For its part the
Soeharto government had announced on January 29, 1974, a series of measures
aimed at assisting pribumi businessmen; this action had been intended to
cope with growing domestic criticism that the government was favoring
enterprises that had connections with local Chinese entrepreneurs,
high-ranking government officials, and Japanese and other foreign investors.
In addition, the government has sought to increase economic links with
Western Europe in an attempt to balance Japan's economic influence.

     In the early 1980s Japan appeared likely to maintain its high profile
but under continuing pressure to make more "selfless" contributions to the
promotion of indigenous enterprises and to be more responsive to the
Indonesian need for technological transfer. The Japanese intention to
strengthen its partnership was evident in the agreement for scientific and
technical cooperation signed with Indonesia in January 1981. At the time, both
sides were of the view that such an agreement could be likened to a fourth
leg in a table-the four legs being Japan, the Federal Republic of Germany
(West Germany), France, and the United States.

                                    * * *

     Given the political predominance of the military since the mid-1960s,
there has been considerable scholarly interest in the sociopolitical profile
of the Indonesian military officer corps and the interactions between the
armed forces and nonmilitary groups. Among the useful sources readily
available in English are Ulf Sundhanssen's "The Military in Research on
Indonesian Politics" in the Journal of Asian Studies (February 1972); Peter
Britton's "Indonesia's Neo-Colonial Armed Forces" in the Bulletin of
Concerned Asian Scholars (July-September 1975); and Richard Robison's
"Culture, Politics, and Economy in the Political History of the New Order"
in Indonesia (April 1981). For deeper understanding of the military role in
the political structure, especially informative are Donald K. Emmerson's
Indonesia's Elite: Political Culture and Cultural Politics (1976) and "The
Bureaucracy in the Political Context: Weakness in Strength" in Political
Power and Communication in Indonesia (1978); Harold A. Crouch's The Army and
Politics in Indonesia (1978); and John A. Mac Dougall's monograph "Patterns
of Military Control in the Indonesian Higher Central Bureaucracy" (1982).
David Jenkins' "A New Order in the Army" and "The Aging of the New Order,"
both appearing in the Far Eastern Economic Review, are also informative.

     Broader perspectives on government and politics in Indonesia can be
gained through reading Guy Sacerdoti's "Acrobatic Technocrats Star in an
Indonesian Balancing Act" in the Far Eastern Economic Review (1980); The
Politics of Islamic Reassertion, edited by Mohammed Ayoob (1981); Geoffrey
C. Gunn's "Ideology and the Concept of Government in the Indonesian New Order"
in Asian Survey (August 1979); and Michael Morfit's "Pancasila: The
Indonesian State Ideology According to the New Order Government" in Asian
Survey (August 1981). There are other useful readings too numerous to mention
here. The survey articles on Indonesia appearing in the February issues of
Asian Survey are especially enlightening, as are the summaries on Indonesia in
issues of the Asia Yearbook published by the Far Eastern Economic Review. For
official views on the political process, the most authoritative sources are
the two annual speeches of the president, one in January concerning budget
presentation to parliament and the other to commemorate the independence
anniversary of Indonesia and coinciding with the opening session of parliament
for the coming year. (For further information and complete citations, see
Bibliography.)