COPY HO.3
SPECIAL ESTIMATE
THE SIGNIFICANCE OF THE NEW INDONESIAN GOVERNMENT
Approved3 Published3
The Intelligence Advisory Committee concurred in this estimate on IS The FBI abstained, the
subject being outside of its jurisdiction. The following member organizations of the Intelligence Advisory Committee participated leith the CentralAgency in Ihe preparation of this estimate: The intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and the Joint Staff.
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THE SIGNIFICANCE OF THE NEW INDONESIAN GOVERNMENT1
THE PROBLEM
To estimate the sigriificarice of the newly established government in Indonesia with particular reference to indications of probable future trends.
Indonesian cabinet which took office3 is more leftist than any preceding Indonesian government. Although there is no evidence to indicate that any of the ministers are subject to direct Communist discipline and control, eight important ministriesotal ofre held by individuals who will probably respond or. many issues to Communist influence.
The new cabinet's program follows closely for the most part programssupported by more conservative elements in Parliament. We believe that the cabinet will proceed cautiously with its moderate program and will avoid the adoption of radical policies.
We believe that the present cabinet will remain tn office for at least six months. However, as time passes, the tenure of the cabinet will becomemore uncertain because:
'This esuouu addresses Itself solely to the slg-nlOcance of the Indonesian cabinet which took officeor an estimate of the general court* of Indonesiante KTE-TT. -ProbaBle Developments Inhich waa pabaabed onane liSJ
pro-Communist inclinationmembers of the cabinet andthey will have to placetn key positions in thethe armed forces, and thewill probably aid the anin its present efforts tomay cause conservative membersnow represented in theto recognize more clearly thedanger.
present cabinet must soonercope with controversial issueseconomic problems, internalpolicy, and armyview of its slim majority ingovernment will run the risk ofan adverse vote whichits fall any time it seeks to dealissues.
through inexperience orpressure, the presentnot deal effectively withproblems. Failure to halteconomic trends could cause thethe government.
0VT-
n the basis of present indications, we believe that the Communists will increase their influence in Indonesiaesult of the tenure of the present cabinet; we do not believe that during the next twelve months they willominating position either through armed force or political action,3
DISCUSSION
and Position of the New Cabinet
he Indonesian cabinet resigned. This action was largely the result of an intensification of the political conflict between the two major Indonesian political parlies, the Nationalist Party and theboth of whom were represented in the cabinet. To help counter the popular strength of the Masjumi, the Nationalist Party had for some time cooperated with the Communist Party. On the other hand, the Masjumi, alarmed by this growingsought to relegate the Nationalist Partyess dominant position in the newThis struggle for power delayed the formationew Indonesian cabinet for nearly eight weeks, during which time the Nationalist Party sought to achieve arole in the new government in order to enhance its political position beforeelections were held.
The Nationalist Party won the struggleugust when the President accepted alist headed by the Nationalist Party. More leftist than any preceding government, the cabinet is dependent on Communist votesarliamentary majority. Eightministriesotal ofre held by individuals who will probably respond on many Issues to Communist influence.there is no evidence to indicate that any of the ministers are subject to direct Communist discipline and control, and there are no known Communist Party members in the present cabinet. For the first time, an Indonesian cabinet does not include thethe party with the most Parliamentary strength and the greatest public support.
The Prime Minister and theof Foreign Affairs, Economic Affairs, and Finance are members of the Nationalist
Party. Except for Prime Minister All, all these ministers belong to the Party's left-wing. The Ministers of Defense, Finance, Labor, and Agriculture will probably beto work with the Communists on many issues. The Ministers of Foreign Affairs, JusUce,nd Education will probably work with the Communists from tune to tunc. However, thetendencies ofabinet members will be held somewhat in check by the Prune Minister and the otherembers of the cabinet, who can exercise considerableby threatening to resign. Suchwould probably cause the fall of the cabinet. Under these circumstances, there appears to be no Immediate possibility that the Communists will attempt to use thisto force adoption of radical policies.
'The Special Assistant for Intelligence,of Slate,oth the scope of thisand tbe evidence presented Itiaufflcleni to permit the assessment here made ofcapabilities in Indonesia over aperiod. The Special Assistant conalden the foUowlng assessment of Communist eapa-bUIUei In Indonesia lo be moreccord with the subject and scope of the present estimate:
As long as the present cabinet remains ln power, the Communists will beoiitlon gradually to Increase their Influence- On the basis of present indications, the CornmunlsU are not likely toominating position In Indonesiathe ecpected life ot thiseither through armed force or political acUon.
'Since IAC action on this eiUmate. Mr. Abikusno resigned as Minister of Communications-
he parties represented in the cabinetotal ofotes outctive Parliament members. Votes of thepartiesMasjuml, Socialist, Christian, Catholic, andight out ofndependent votes will probably go
to the government, giving the governmentotes shortajority. The Communist Party of Indonesia and the Communist-dominated labor federation (SOBSI) have already indicated that they will support the government with theirotes. Thus, the cabinet must rely on Communist support to win Parliamentary approval of any controversial measure. The Communists, while unable to insist on all measures which they may desire, probably will press forand conditions conducive to expanding their influence while avoiding any radical policy which might split the cabinet and cause it to fall. Parliamentary support for the cabinet is uncertain due to the lack of party discipline, althoughesire to remain in control of the government may tend to tighten party obedience. It is quite possible that themight gain sufficient votes to cause the government to fall.
Policies of the New Cabinet
program announced by the newIs similar to the programs of itsThe program stresses domesticthe importance oi holding generalan economic policy based on theof the common people, anpolicy,evision of thebetween Indonesia and the Netherlands.
First place in the government's program was givenledge to settle the internal security problem along military and political lines. The government's statementall armed dissident groups andquick action so long as it had the support or the people. However, it Is likely that only limited action will be taken against any armed dissident groups because; (a) an all-outwould cause further strain on theeconomic resources; (b) theof whether or not to take drastic military action against the principal armed dissident group. Darul Islam, is an extremelypolitical and religious Issue.
The program calls for the holding ofelections for Parliament and for aassembly in accordance with thelaw passed by Parliament innd the governmentimetable to enable the elections to be held byn the meantime, attempts are likely to be made by various political parties to establish control of election machinery.
The cabinet's announced economicprovides little definite indication of the government's Intentions. Little change is expected in agricultural policies. No definite statement was made regarding foreignor nationalization of estate or other foreign holdings, but the new government will probablyolicy less favorable to foreign investors, particularly with respect to labor legislation. Certain governmentindicate the possibility that the previous cabinet's stringent importdesigned to conserve foreign exchange, may be abandoned and that furtherand further credit facilities may be made available to Indonesian businessmen. These policies could leadarger balance of payments deficit and to inflationary pressures.
The new government has Indicated that it will in general follow the existing foreign policy but will give even greater emphasis to Indonesia's "Independent" position. Stress has already been laid on the importance of establishing closer relations with the Soviet Bloc in order to counterbalance those now existing with the West. Arrangements will probably be made soon to open an embassy in Moscow, an action approved by theunder the previous cabinet. Attempts will probably be made to increase trade with the Soviet Bloc, but significant results are not likely. Concerning US aid. the foreignhas announced that the agreement to receive technical assistance will be continued but will be reviewed in order to determine how advantageous it is to Indonesia. Otherpolicy objectives are likely to be: (a) the negotiationilateral treaty with Japan to supplant the San Francisco treaty which the Indonesians signed but did not ratify;evision of the relationshipthe Netherlands and Indonesia, dls-
> rn
solving Che Netherlands-Indonesian Union and replacing Lhe existing Round9 with normal International treaties; andenewal of demands that Western New Guinea become part of
Proboble Developments
he new cabinet's program follows closely for the most part other programs previously supported by more conservative elements in Parliament. We believe that the cabinet will proceed cautiously with Its moderate program and will avoid the adoption of radical policies. Its Parliamentary support is too uncertain to risk quick or decisive action on long-standing controversial issues, such as action against dissident groups, armed forcesand implementation of the election law.
all-out attack on the Darulprobably have some support fromthe armed forces, and thoserepresented by the NationalistsCommunists. However, suchprobably cause the MoslemIn the cabinet and their parties Into withdraw their support ofthus precipitating Itsis probable therefore that only limitedaction will be taken against thein general while attempts toagreement with the Darul Islam mayin order to mollify the
present government will avoiddecisive steps to resolve theof reorganization and modernizationarmed forces- Any sweeping changesarmed forces command, particularlyinvolved appointing Communistssympathizers, would probablyopposed by the bulk of theand the National Police MobileIt Is probable, however, that thewill attempt to makein the leadership of the armedwill probably be successful Inelements therein.
implementation of theis promised by the cabinet, we believeis the earliest date that the election could be held. Attempts will probably be made during Lhe tenure of this government to establish control of the election machinery to enhance the prospects of government parties in the elections.
We believe that the present cabinet will remain In office for at least six months. The opposition in Parliament does not havestrength to defeat the cabinet,so long as the Communists continue to support the cabinet. The opposition isarticularly difficult position because It hasimilar program and where it does disagree with Lhe cabinet, it is advocating policies which have little populareasures to attract foreign investment and Increase economic austerity.
However, as time passes, the tenure of the cabinet will become considerably morebecause:
pro-Communist inclination ofmembers of the cabinetand thethey will have to place their supporterspositions in the bureaucracy, theand the policewill probably aidopposition in its presentto solidify and may causeof groups now represented into recognize more clearlydanger. Internalplitovernment party,adverse vote In the Parliament mightthe government to fall. It isoup might be undertaken byelements in the bureaucracy andarmed forces.
present cabinet must sooner orwith controversial Issues such asproblems. Internal security,and army reorganization. In viewslim majority in Parliament, thewill run the risk of incurring anwhich could cause its fall any timeto deal with these issues.inaction in handling theseprobably also lead to the fall of
ODOriDT
Indonesia's economy is in precarious condition at present. Either throughor leftist pressure, the presentmight not deal effectively witheconomic problems. Failure to halt adverse economic trends could cause the fall of the government.
s long as the present cabinet remains in power, the Communists will beosition gradually to increase their Influence. They will continue their attempts to strengthen their position by (a) Increasing theirin the Nationalist and other parties represented in the cabinet; <b) placingand Communist sympathizers inpositions in the various ministries and In the armed forces; and (c) improving their chances for popular support in theelections. The Communists will be able to exert considerable influence over thebecause of the latter's dependence on Communist support in Parliament. However, we do not believe that through such measures the Cornmunists will be able to gain control over the government during the expected life of this cabinet. On the other hand, if this cabinet remains in power for an extended period ot time, the Communists maybeosition to dominate Indonesia.
IS. On the basis of present indications, we believe that the Communists will increase their influence In Indonesiaesult of the tenure of the present cabinet, we do notthat during the next twelve months they willominating position either through armed force or political action.*
Special Assistant for Intelligence.of State, considers both the scope of this estimate and the evidence presented Insufficient to permit the assessment here made ofcapabilities la Indonesia orer aperiod. The Special Assistantthe following assessment of Communistln Indonesia to be more ln accord with the subject and scope of the present estimate:
As long as the present cabinet remains ln power, the Communists will beosition gradually to Increase their influence On the basis ot present indications, th; Cocnmunisu are not likely toominating poalUon ln Indonesia during tbe expected life of this cabinet, either through armed force or political action,
Original document.
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