BASIC DUTCH-INDONESIAN ISSUES AND THE LINGGADJATI AGREEMENT (ORE 20)

Created: 6/9/1947

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basic dutch-indonesian issues and the linggadjati agreement

INDONESIA

UNDER THE

LINGGADJATI AGREEMENT

CENTRAL INTELLIGKiCBtreet, M. U.. C.

20

97

sp^-

COPY NO. 31

BASIC DLTCH-IHDOJESIAH ISSUES AND

J^^KC^AafATXAGREE^tiT

The signing of the Linggadjati or Draft Agreement between theof the Netherlands and tho Indonesian Republic on7 cliaaxed nearly fourteen laontha of difficult negotiations. Remainingin interpretation of the agreonent, however, are so doop andthat orderly progress touard final adjustment of Dutch andaspirations in the islands cannot be expected.

The fundamental conflict is uetueoo the Dutch view that theland* will continue to be tho sovereign power in the Indies until the United Statos of Indonesia (USI) is formed, andpuhlic'a view that Netherlands sovereignty docs not extend ovor Republican territory ln tho intorira period. Tliis diffcroneo iapedos the process of nutusl edjustnont and jeopardizes any effort of cither party directed touard the foruotion of the USI ond thetabllshncnturnblo relationship between tho Kcthcrlands and theRepublic. Stonming from this banlc issue and the ;iutunl distrust which it has ongondeved are tho following issues which aunt bo adjusted in tho next two years before tho USI can bo established! he reduction of adlltary forces on bothhe restoration of Dutch properties in Republican territory to their formerho roconeillntion of Ihc foroign trado policios of tho I'othcrlcnds Indies Govornmcnt end ttc Indono-sianho political organization of the portions of lhe Indios which lie outside the Ropublie;he control of tho foroign relations of the Republic.

In the resolution of these tames, tho bargaining positions of tho Netherlands and the Indonesian Republic arc nearly balanced in political, economic, and military terns. Tho resultant dolays in negotiations nro leading tho Dutch to considor an attempt tooclsion by military force. Thifl.in turn, will aggravate anti-Western sentiacnt throughout tho For Best and night leadonsideration of tc dispute by the UNCouncil,

.oris, joint

In

the Unggn-

including the Dutch proposaltlatinn.

Weekly Suimury.

ENCLOSURE

ackground Dutch and

At the conclusion of World Wareadlock developed between Miwn ana Indonesian plans for the future The Dutch hoped toonmonwealth subject to the Crown, embracing as equals the ^Netherlands, Surinam and Curacao in the Western Hemisphere, and the Motherlands Indies. The newly-formed Republic of Indonesia, however, decanded completefroei the Kotherlands. The collapse of Dutch power arid prestige in the oarly days of World War II and tho suboeqi.'Gnt Japaneoo occupation policies of huuilialing tho white race and stimulating the already strong nationalistic spirit of tho Indonesian pooplos, nade impossible anyto tho pro-war status quo. As Alliod powor began to threaten Japan's position in thoapaneso-sponsored Independence Preparatory Com-nittoo was foraod in Java in tho spring ofto lay down thc franc work of en independent Indonesian Republic.

The Republic was proclalacd on5 and laacdlatoly began to extend its power throughout thc Indies following tho surrender of Japan, Alliodonth lotor found Republican governors in sevaral of thc outlying islands and Hcpublican control well established in Java. ait accocpli faced Dutch nut'.critics as they returned to the Indies and provented tho restoration of Dutch control in Java, Mi-dura, and Sumatra, negotiations to rcsolvo tho lmpasso between tho Dutch and tho Republic wore delayed untily widening hostilities between Rcpublio forces on ono hand and British and Dutch troops on thc other. Furthermore, the Dutch refused to have cnything to do with thc President of the Republic, Achscd SocJcarno, whoa they regardedraitor.

Negotiations finally beganhrough the goodof Sir Archibald Clork-Korr, British special representative in tiic Netherlands Indies, and were based upon tho Dutch Statement of Policy of that da to. This statement provideemocratic partnership for tho component parts of tho pre-war Kingdom of tho Netherlands,lear recognition of the right of Indonesia,iven period, to elect to loavo thc partnership. Tho Dutch, however, expressed tho view that thc boat interests of Indonesia would be served through tho continuance of cnu rcoln, Thc Indonesians answered thc Dutch Statarxnt on li6ountor-proposaletter frou Proaier Sjahrir, which domarxJod (a) Dutch recognition of Republican sovereignty in tho Netherlands Indies, and (b) the Ifflccdiato realization of tho Indonesians* right to sclf-dcter-nirotion. Tho Republic regarded tho Commonwealth suggostcd by the Dutch as oeroly on attempt to restore Dutch controlow none.

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conversations continued during kirch end april with tho question of surr.tra's position within or outside the republic left in ctcynr.ee. the dutch protocol of6 recognized republican do fecto cuthority in java, but not in sunatro. sunr.tra, like otlier nrons in the indios, ves to bo given an opportunity freely tots own stctus ir. tho proposed free state of indonesia. in june, this protocol was rcjoctod by theand negotiations wcro broken off and wcro not rccirocd until early in october, by whichutchad nrrived in theto carry on the talks.

the dcclrxction, onruce in the dutcv inojoncslan hostilities helped to crcctc favorable conditions for rjietween tho opposing views. tho dutch then,ecognition of tho republic's do facto authority in javc nnd sumatra and the inclusion of the republic in the federated states of indonesia. in answer, tho indonesians proposed ccnfimc.ti'jn of dutch economic rights in indonesiaeduction of dutch forces. agreement on those points una reached at the town of linggndjatiron chcribon) onnd the draft agrconcnt (see appendix A) wan initialled throe days later. both delegations then returned to their reopoctivo governments to obtain authorization for signing.

during the succeeding cwntho, moderate nanbers of both govitrnixints encountered strong opposition fron extremist elenents. in the motherlands, conservative nilitary leaders and businessmen felt that dutch politicalo no .lie power in the islands was jeopardized by the vague position of 'he crown in tho new arrangement (ace appendix a, article viii) and by the an-biguous provisions of article XIV of the iraft agroenent concerning tho restitution of dutch property to foraer owners. in indonesia, cxtreniato regarded tho agrecxtcntiploratie defeat for tho republic because the republic hod not been given itnodiate indepundenco*

netherlands covornnent, despite the opposition, finally ap-

proved tho draft agreerwnt as "basicnut its delay in taking this action had added to indonesian suspicions of dutch intontions nnd had thur, node the position of indonesian prepencnto of the draft agrocnont norc difficult.

at thofhough both tho dutch and thodoclorcd thoir rondinoaa to sign tho lingpndjatl agroenent, they disagreed aa to the conditions of signing. the dutch insisted that tho indonesianseneral cease-fire orderho truce ofnd agroc to tho dutch interpretations ofp-ecrsont. theso interpretations wore enbodiedtato/icnt by dutch overseasjonkmn and in tho elucidating konorandun of the cornission-gencrel prosontod to tho statc3 goncral on6 in defonse of the

rccncnt. Thc Dutch interpretations strossod that tho Mother-

,Orcienin tho Indies until tho cstablishrscnt ot the USI, and that tho llcthcrlando would mintoinlitary power there until satisfactory guarantees for the continuation of Dutch interests wore secured.

easo-fire ordor wos finally issuedho Republic steadfastly refused to be bound b" Dutchnclntalnine that the Republic would recognize only the articlesAgree:*nt itself nnd the official correspondence between the two Indonesian opposition to the Linggadjnti Agreer1ontafter the initialling of theesult offighting between Dutch and Indonesian forcoa and of Dutch insistenceadherence to their interpretations. In order to forestallof tho Agrccccnt by thc Republic's provisional pcrllancnt, thoSootarnoresidential decroo increasing the that body with representatives selected fror. politick parties norocispoood to tho Agrooocnt. This novo aroused coniidtrablowas finally passed, only under thc threat of resignation byand Vice-President Katto. Final approval of tho Linggadjatiwas given by tho KHIP7ote of confidence inpolicies fron which tho influential nationalist andFortlos

. . ho deadlock over thc inclusion of tho Dutch interpretation! had been brokenetter7 fron lho choirnon of the Corr Jssion-Ccncral to Premier Sjahrir indicating that tho Netherlands Government did not intend to conrdt tho Republic to those interprotr.tiona and that the right of the Ropublic to iinko its own interpretations woe clearly This was accepted by Sjahrir on7 and signatures were finally affixed to tho Linggadjati Agrccnent onoint economic cortdtteo una immediately established to iriplcMnt thc economic provisions in, tho Agrconont,

2. Regaining

S- The Boole Is sup of Sovcrcirntv

- - T^ oigning of tho Linpgadjcti Agreement left unsettled nnny issues

itiZtt fUUca*n on of sove-

reignty. Prominent Indonesian leaders now regard the Republicn inde-

of Republican au!

J? ifthe other hand, have empha-

sized that the basic sovereign entity envisioned for the Indies in the

Linggadjati Agreenent Is not the Republic but tho United St-.te3 of Indonesia, in which tho Republic is but one of three conponont parts. The Dutch also hale! that during tho inter In period preceding tho fomstion of thc USI, tho Netherlands will continue to bo tho sovereign pouor in the whole of tho Netherlands Indies,

This basic dissonslon, together with tho strong nutual suspicions built ur through tfc put roarostilities and low,, -tiations, is tho cost sorious i'lpodincnt to the cstrbllshnent of newand econonic relationships between Ok Dutch and the Indonesians.

b. Puriosc af the Arr^cT'gnt

This fundanontcl difference in views isn the Dutch and Indonesian opinions as to tho general nature and purposo of tho Linggadjatl Agreenent. Uhilo tho Dutch regard itcharter of principles" uponew Dutch-Indonesian partnership can be built, to thc Indonesians it isonvenient stop toward tho unalterable goal of complete independence Indonesian nilitary end political loaders have repeatedly warned the people tliat the Agreement isemporary measure, that its signing has noti the "nationalnd that, if no longer necessary to theit will be abandoned.

o. Withdrawal of Troops

No progress has been ar.de toward iripleiontiiv; Article XVI of the Agroenont (seehich, provideseduction of the aruod forces of both portion f'iroctly after the conclusion of the Agreement.

In keeping with thoir misgivings about Indonesian intentions, the Dutch desire to mintrin their military power in tho Indies until there eraGuarcntoos that tho now rule of law will bo observed by thc esult, tho Dutch have been reluctant to inplenont Article XVI. The Dutch clain they are observing this Article by initiatingnccsures preparatory to reductions in thoir troop strength. Thowent ixnct'lato troop reductions without any dilatory preliminaries end have seught to hasten reduction bythat the rate ofof Dutch properties In Republican territory' will boby the rata of Dutch troop withdrawals. Fur therm rc, the facts have cot been lost on the Indonesians that (a) thc Dutch under tool: military actfans in Eastern ^ava after tho Agreenent had boon signed; (b) Dutch troops, said to becontimio to arrive; and (c) the Dutch plan tof7 draft claus0 mon to thc Indies, now that overseas duty for conscripts has bocn authorized by thc State Ccnoral. For thoir part,irregular groups have announced that tboy uill not disband until thcf tho "revolutionary period".

6

In /jtlclo XIV ofrcimcnt, the Republic recognizes the claims of non-Indonesians to tho restoration ot their righto cm! the restitution of their goodo. The roturn to Indonosio of nen-lrytoncslan businessmen tu!owners, however, will be conplicatCi by ocononic policlos laid down by tho Republic, designed to prevent any return to colonic! aonoooHoticof native resources nnd lsbor. The Republic will continue to hold ownership of Stnto proportion such as railways, public works, and utilities, and of such property as wa3 owned by Japan In Republican territory. Certain enterprises, to be determined ns "vital"pecial Ronublic coanittac, will bo expropriated ami thoir former owners will bo indoonifiod. Republic Minister of Economic Affairs Goal has declared that the Republic cannot grant pcrtiiBsion to foroign owners to rosuao operations boforc an agreement io reached between tho Owner and tho Republic concerning such basic natters as wares, worker oocurity, induction of Indonesian personnel into tho nanngo-cent of the cntcrprioo, land rent, taxation, import nnd export quotas, rnd production and distribution policies.

Thore has been socc recent evidencehe single labor organiof tho Rcpublio, SOBSI, i3 nctinc ns local custolian for foroignong period of dolicato negotiationsowerful but inexperienced labor union is in prospoct bofore Dutch economic interests may rosurac thoir activities, and even then they will be rcruncd under greatly restrictedas coopered with their pro-war freedom.

Cortoin foreign cooponics have eironJy reacted to thia policy by demanding nssuranccfl that all installations end facilities, cs well oa their operations and caployoos, will be under tho coapnny'a direct and exclusive control In ordor to fncilitato inprovcaents in the conditions of the workers as operations are rcsuacd.

2* Foreign Trade

Publicthe R<

the conflicts in Dutch nndrom

controls of the Dutch also dcrivo fron tho conflicts in Dutch and Indonesian views on the Republic's sovereignty in tho intorlm period. Tho Dutch trade regulations of7 end th-jir enforccaent, notably in the case of the US vessel "Martinore designed to prcvont tho Republic's engaging in foreign trade except through Dutch official channela. The decroes were Justified by tho Dutch on the grounds that tho producto sold in trade by the Ropublic wereillicitly fron European estntes end were sold indiscriminately at prices below thoir value in tho world oarkot, theroby progressively Lnpov-erishing the Indies. The Ropublic'a view una that auch trade wao notunder its rightse facto authority to soli the products of estates under its control, particularly when the coot of maintenance ^f

tho estates ond labor since the end of the Japnncao occupation had been borne by tho Republic. The Republic, by its contention that the formdation of regulations governing exports, inports, and financial setters in Java, re-dura, and Sunatrr. aro tetters for the Republic to decide, has inpoc'.od the operations of tho Joint Econonic Connittcoith implementing the ocoiiomic provisions of the Lincgadjati Agrecviant. This, in turn, ha's shaken the faith of Dutch business interests in the efficacy of negotiations with the Republic and has strengthened tho position of those who advocate the use of force to bring about inplcnentcticn of the Lin&jcdjati Agreenent.

Fbrmtton of

In tho political sphere, Dutch and Indonesian views rtiffor on the organization of the areas of tha Indies which lie cutsido tho Republic. The Dutch desiro that tho USI embrace at least throo distinct states, mro or loss bclanccd acclnst each other, to prevent tho Republic'sonlnant positionis tho others.

Tho second conponcnt part of tho United Statos of Inc'onosia, the state of East Indonooia, was cstnbliohoc! at Don Pooar, Roll, oncrloj of conforences, at Molino in6 and at Pang-kal Pinang inotueon thc Dutch and raprcsor-tativos of thc outlying areas. Tho future status of Borneo is still indefinite. Pro-Republican scntinont, oopecially in South Borneo, has prevented the forrc-ticnnitary state in Borneo. Tho Dutch rwanvhilo have sponsored tho formationeparate stato of West Borneo, end ore now organizing other rcgiiaos in East and Control Borneo.

Tho absonco of Republic participation in these conferences has led the Republic to charge the Dutch withticlo II of thc Lincgadjatl Agreenent, vhich provides for Dutch-Republic cooperation in tho fomatien of thc USI. Tho Republic further has charged that the conferences wcro not truly representative sinco various pro-Republic groups in tho outer islands were not included. Tho lottor groups hevo announced their support of tho Republic in nt'norous asscnblios and broadcast resolutions.

Furthornoro, scvoral statencnts by Republic officials oppose Dutch plana to thc extent of nmonmrlm tbo Republic's intontion of bringing the entire archipelago under tho Republic's control. Vice-President Hattc has also declared that tho creation of tho USI is "the first step toward thc unity of thc entire Indonesian archipelago under tho Republic rcgino."

fi. Area of tho Republic

Parallel with Republic efforts to draw portions of thc outlying islands into its sphcro of influence, there have been attenpts to divido -he Republic and to roc'uco its croa. Onutch Overseas lunlstor Jonkmn statod that Articles in and IV of tho Linggodjati

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Agreement "give en opportunity possibly to split the present Republic in such ports as would desire independencethe opportunity has been held open for Madura, for Sumatra (integrally or inor the Sunda lends, end whichever other population-groups one might consider, toosition of thoir own in the federation (USI)likewise the possibility exists that an area not now part of the Republic's territory may choose for the Republic."

The leaders of the Posoendan Party, claiming to representundanese in West Java, proclaimed the independencensoondon State from tho Republicevelopment which oust bo viewed in the light of Jonknun's remarksort of the Dutch policy aimed atthe Republic's territory. Tho Dutch may nlso attempt to draw Madura and portions of Sumatra away from Republican control, capitalizing on Suirotran antipathy to any rule of Sumatra by Javanese. Continual efforts by theto penetrate and strengthen Nationalist and pro-Republican movements in tho outlying islands of tho "Molinoogether with Dutch counter-efforts to limit tho Republic's area of authority and provont itsominant Influence in tho Indies, will alsoerious obstacle to the formation of the USI by tho planned dato

h. Foroign Relations

Dutch-Indonesian differences extend also to the fiold of foreignTho Dutch view is that, since tho Netherlands will continue as the sovereign power in tho Indies until the formation of tho USI, the Indonesians will not bo entitled to conduct independent diplomatic relations until after tho USI has como into being. In tho interim period, tho Dutch plan to admit Indonesians to tho foroign service of tho Realm nnd to conduct foreignas they relate to the Indies,ewly-established Far Eastern Office of tho Foroign Ministry in Batavia.

The Indonesians, however, regard these plena as merely Dutchof tho Linggadjnti Agreement which, cs such, ear-not bo considered as binding upon the Republic. The Republic regards continued Dutch efforts to retain control of Indonesian representation cbroad as an attempt to prove to the world that Indonesia isart of the Kingdom of the Netherlands: accordingly, the Ropublic has proceeded unilaterally to work out thostops for establishing diplomatic relations with Australia, India, the Arab League, Egypt, Sicm, end Malaya. While tho Republic lacks the meansto transport its representatives abroad, its insistence upon Its right to handle its own diplomatic affairs prior to tho formation of the USI, and the synpathctic attitude of the Arab League, Australia, and India to this con-tontion, will lend an international aspect to Dutch-Indonesian diffcroncco on this question.

i- Arbitratiop

*k o Jf*icl0 XVI1nggadjatl Agroenent states that tho Dutch and

UIU LUiliirj il(JU

rtcpubHc delegations "shall settle by arbitration any dispute which night

arise fron thisnd which cannot be .tolvod by joint consultation in conference between thoseet there is disagreement between tho Dutch and Indonesians oven upon tho ratter of settling thoir disnrrccnonta. Tho Motherlands interpretation of Article XVII holds that it applies only to to relations bctwocn thc Republic and the iicthorlands but not to nattersto the USIhole. Tho text of thc Agreenent sceos clearly to indicate, however, that disputes concerning the USI should bo included in ar-bitrotion settlements, sinco tho USI ia an integral port of thc Linggcdjati AgToociont,

i- luj.ior.n

In sunrory, the Dutch desire to achieve, through the binggedjati Agroencnt, (a) the raiintonancc of Netherlands sovereignty throughout the Indies until the forrxition of the USI;e integration of the Sepub-licederal USI as one of its component parts; and (c) the rosto-ration of economic rights and control of foreign relations.

In opposition to these cins, the Indonesian Republic socks {a) the free exercise of all tho prerogatives ofovereign sicio by virtue of thc facto recognition of its authority inadura, end Sumatra,the control of econonic activities within its territory and thc conduct of its own foreign relations; and (b) the control of tho entirenitory USI un".or Republican domination.

Tho resolution Of those divergent ,vi:is in the future depends upon tho relative bargaining positions in political, economic, and military tcms of the two adversaries.

In political terns, the Republic is strong so longho presence of the Dutch in Java and Sunatraciv.ee to Lho Moderates and extrosists in thc ^ovornaont of the Republic vigorously oppose any effort by tho Dutch to impose their will by force, but split apart during negotiations, according- to their nodcrotc or extrcoc reactions to Dutch proposals. Indonosi-in nationalist! isource of strength in its unifying force in opposition to Dutch colonialism, but there is,an olonont of weakness in its ant?go::iav.s, traditional or fostered, toward tho dominant Javanese on tho port of other ethnic groups* Such antog-oniens can be used by the Dutch toivide-end-rule strategy and to convey an inpression of weakness and dissension within tho Republic.

The Motherlands, however, is also politically divided over Indies policy between conservatives, business interests, and tho nilitory on thc one hand, and rodcratos, liberals, and left-wing clcnonts on tho other. The Cornertrong policy alined at the rapid restoration of Dutch rights in tho Indian, while tho latter favor negotiated settlerxmt and the creationartnership of the Motherlands and the Indies as" thc best noons of preserving Dutch influence overseas.

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In international tor OB, tho Republic is strengthened by tho fiynpathy of Oriental pooploj who oro also opposol to Western control, ouch oa India, Burra, and Viotnon, or who have oonaon ties of religion, such ao Oio nations of the Arab League. The Republic's struggle for Independence al30widespread sympathy throughout the world, while other nations desiring access to the resources of the Indies are quite willing to deal with tho Tho Netherlands, however, retains the monopoly on diplonaticfor the Indies and. continues to be recognizod by other nations as tho ooveroign authority over the areo.

In economic terns, the Republic possesses great natural wealth but lacks thc technical experience to exploit it to its own best advantage, and is provented from exporting cceroditios now on hand by stringent Dutch trade regulations and thoir enforcement by naval Mockade. Tho Dutch, for thoir part, need access to tho wealth of Java and Sumatra to acquire tho foreign exohango necessary to finance tho rehabilitation of the Nothorlanrla and thc Indies. Tho prolongation of the present stalov-ate will thoroforo result In financial end ocononio hardships to both sidos.

In military tents, the Republican forces arc lossnd trained, but these disadvantages are lalonccd by greater ease ofand movt-ment on Interior lines of conoinlcation. Dutch forces, on the other hand, must bo suppliedistance of ;iany thousands of nilcs,ong period of accllnatizution to tropical conditions, and pousoBs complox equipment subject to rapid doteriorntion in tropical warfare. the cost of maintaining over one hundred thousand troops in Uie Indiesonsiderable strain on tho economy of thohich cannot be offsot by tho proceedsolow of trade until relative economic stability is restored.

Tho Dutch and Indonesian bargaining positions aro thus nearlyalthough the Republic probably can afford soma delay bettor then thc Netherlands, which is undereconomic prasauro. This pressure is loading the Dutch to consider aorlOUOly aroecision by Military QoaQO, which would resultrolODCOc!ostly- campaign. This, in turn, would engender increased anxtern fooling in Asia tad might lead toation of tho dispute by thc UnitedSecurity Council.

Continued attonpts at negotiate1 ncttlrrmnt will also bo protracted because of thc rolatlvo balance of power and thc crucial importance of Ihc issues involved. Delays in negotiation, apparently hopeless stalemates, and tho growth of mutual suspicion and impatience increase tho possibility of armed clashes In the period of adjustment preceding the creation of the USI. Tho USI, itself, when and if established, will possess grave weaknessesfrom its evolution from eoripronise to conprordoo, whoso non-obscrv-anee night easily leadinal brook end the collnpno of the whole Moanwhilo, the lackettlement continues to nake it impossible for tho rich resourcoa of tho Netherlands Indies to contribute to theof ocononio stability throughout the world.

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EXT OF TH5GREE! EMT-

PRSA.BLE

Tho Nothorlonds GOTorrtncnt, rnnroscntod by tho Cocrission Genornl for tho Motherlands Indian, and tho Covcrnront of tho Ronublic of Indonesia, ro presented by tho Indonesian delegation, covedlnccro desire to Insure goodbotrcon tho peoples of the Kothorlands and Indonesia in nei? forra of voluntaryich offor tho best guarantee for sound and otron* development of both countrios 'n tho futureich lake it possible toaoundation to tho relationship botroen ths tro ocoples, agrco os follows and illl oubnlt this agreoront at tho ahortcst possible notlco for tho approval of tho respective I'arllarontoi

ARTICLE I

The Kothorlands Govornront recognizes tho Govorn-ient of tho Republic of Indonesia as exercising do facto authority ovor Java, 'adura and Sun/itrc. The areas occupied by Allied or Motherlands forces shall be included gradually through nutual cooperation, in republican territory. To this end, thc ncccssar neasures shell at once be token in ordor that this inclusion shall be conalcted' ot the latest on tho data ncntionod in Article XII.

ARTICLE II

Tho Kothorlands Governnent and tho Government of the Republic shall cc-oporate In tho rapid fornntlonovereign democratic stateederal basis to bo callod tho United States of Indonesia.

ARTICLE III

The United Statos of Indonesia shall con-vise the ontire tnrritory of tho Kothorlands Indies, uith tho provision, however, that In caso thoof any territory after duoth tho other territories, should doclde by democratic procoss that they are not, or not yet, -IMlng to join tho United States of Indonesia, they eonpecial relntionshio forerritory to thc United Statos of Indonesia and to tho Kingdom of the Kothorlands.

AJfTICLE 17

Tho conponcnt parts of the United Statos of Indonesia shall be the Rcmb-lic of Indonesia, Borneo and tho Great East without prejudleo to the ripht'of tho population of any territory to decide by donocratic oroces3 that its' oosi-tion In the United States of Indonesia shall be arranged"otherwise. Jithout

derogation of thc provisionc of Artlclo HI and of tho first wo^ra* of this nrticlo, thc United Staton of Indonooio rny Tuko spoclal arrnngorontstho territory of ito capital.

ARTICLE V

Tho Constitution of tho United States of Irdonosl*bo do to mia Constituent Assorbly composed of tho doiocratically noainatedof tho Ropublic and of tho othor future partnoro of tho UnitodIndonesia to nhich tho following paragraph of thlo nrtlclo shallpnrtlos ahull consult oach other in tho rothod of partlcioatlonConstituont Aseonbly by the Republic of Indonooia, by theundor tho authority of tho Republic and by tho nxouco of thoor Insufficiently,th duo obsorvanco of theGovormcnt end tin Powu'iium

ARTICLE VI

To pronoto tho Joint interests of tho ifethorlanda and Indonesia, tho ^'thorlando Government and tho Govornront of tho Rooubllc of Indonosia shall cooperate in tho ostabliohnontotherlands-Indonosian Union by rhich the Kingdom of tho Bethorlands, connrisin* the Ifethorlands, the Motherlands Indies, Sirlnon and Curacao, shall bo converted into said union consisting on the ono hand of tho Kingdon of the Netherlands, co-irising theards, Surinam and Curaoao, and on tho other hand tho United States of Indonesia.

Tho foregoing paragranh does not exclude the possibilityurthor arrangement of tho relations between tho Netherlands, Surinam nnd Curoeeo.

ARTICLE VII

Tho Kothorlands-Indoncsian Union ahull have its om organs to nro-rote the Joint interests of thc Kingdom of tho Netherlands and tha United Statesdenes ia.

Thaoo organs shall be fornod by tho Govornrwnts of tho Kin-don of the Netherlands and the United States of Indonesia and, if necessary, by the Parlia-ents of those countries.

The Joint interests shall bo considered to bo cooperation on foreign relations, dofonso and, ns fnr es necoannry, finonco, nn wall as aubjoctc of on ccononic or cultural naturo.

ARTICLE VIII

Tho King (lucon) of tho Netherlands shall be at tho head of thoUnion, Decrees and reso'utions concorning the Joint interests shall be issued by the organs of tho union in the Kind's (Queen's) nnnn.

ARTICLE IX

In order to promote tho interests of the United States of Indonesia in thc Netherlands and of the Xingdom of the Netherlands inifh Commissioner shall be appointed by the respective Governments.

ARTICLE X

Statutes of tho Kotherlands-Indonesiaii Union shell, furthermore, contain provisions regarding;

(A) Safeguarding of the rights of both parties toward one another and ontoes for tho fulfillmont of their mutual obligations;

guar

ercise of civic rights by Netherlands and Indonesian citizens;

Regulations containing provisions in case no agroament can be reached by the organs of the union;

Regulation of the manner and conditions of tho assistance to be given by tho services of the Kingdom of the Netherlands to thc United State* ol1 Indonesia as long as thc services of the latter ara not, or areorganized, and

in both port3 of tne union of the fundamentalend liberties referred to in the Charter of the United

ARTICLE XI

The statutes of the Netherlands-Indonesian Union shall be draftedonference of representatives of tho Kingdom of the Netherlands and the futuretatos of Indonesia.

Tho statutes shall come into effect after oporoval by the respect! phrli&nents.

ARTICLE XII

Tho Netherlands Government find the Government of tho Republicdetvor to establish the United Status of Indonesia and the Netherlands-Indonesian Union before Jan,

XIII

Thc Netherlands Government shall forthwith twee tho necessary steps in order to obtain the admission of the United States of Indonesiaember of tho United Nations' organization immediately after the formation of thc Kothurltads-Indonesian Union.

ARTICLE XIV

Tho SmrHM of the ftopublio of Indonesia recognizos tho claims ofnon-Indonesians lo thc restorntion of thoir rights and tho restitution of thoir goods as far as they are exorcised or to be found in the territory over which it exercises de facto authority. oint cozniision will be set up to effect this restoration and restitution.

ARTICLE XV

In order to reform the Governmont of the Indies inay that its composition and procedure shall conform ao closely aa posaible to thoof the Republic of Indonesia and to its projected constitutional structure, tho Netherlands Government, ponding the realization of tho United Stttes of Indonesia end of the Netherlands-Indonesian Union, shallinitiate the necessary local measures to adjust tho constitutional bad international position of the Kingdom of tho Kutherlends to tho new

AHTICLE XVI

Dlroctly tftor the conclusion ofroement, both partloa shell proceed to reduce their armed forces. Thoy will consult together concerning the extant and rate of this reduction and their ccoperi.tion in military matter*.

ARTICLE XVII

For the cooperation betweenNetherlandshe Government of the Republic contemplated in this agreement, an organizationbo celled into existence consisting of dolegations to be tppointed by each of the two Governmentsoint seorotoriat.

The Itetherlands Government and the Governnant of tho RgptA>llc of Indonesia shall settle by arbitration any dispute which might arise from this agrwenent and which cannot be solved by joint consultation Inbetween those delegations. In thathalna-ji of another nationalityeciding vote shell be appointed by cgrooment between the delegations or, if such agreement otnnot be recchod, by the President of the International Court of Justice.

VI11

oonont shall be drown up in the Svtfcerlands and Indonesian . h texts shall havo equal authority.

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