THE PROSPECTS FOR INDONESIA

Created: 3/7/1962

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NATIONAL INTELLIGENCE ESTIMATE

Numliur V> 62

The. Prospects for Indonesia

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THE PROSPECTS FOR INDONESIA

THE PROBLEM

To analyze the major trends in Indonesia and to estimate probable development* over the next year or so with special reference to Indonesia's International orientation and to the West New Guinea dispute.

CONCLUSIONS

ettlement satisfactory to Sukarno is reached with The Netherlands, the West New Guinea dispute will continue, to overshadow and strongly influence all other foreign and domestic Issues in Indonesia. Sukarno will probably draw even closer to the Bloc position on major international issues as Indonesia continues to rely heavily on Soviet military aid and political support for theof the West New Guinea campaign. The Indonesian Communist Party (PKI) will continue to exploit the issue and toegotiated settlement. The diversion of army energies into the West New Ouinea campaign will continue lo hamper its efforts to reduce PKI strength and Influence. President Sukarno will probably continue to be successful in balancing the army and the Communist Party oft against each other while retaining for himself thepower position. In the event of Sukarno's death, it is likely that the successor administration would be headed by top ministers in the present cabinet with Nasution and the army assuming the predominant role in their support.

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West New Guinea settlement, although it mightenhance the prestige of Sukarno and the PKI,both an Issue that has proven politically profitablea decade. The PKI, especially, would be forced toIssues and would probably turn to furtheragainst such targets as Portuguese Timoreconomic Interests In Indonesia. It is unlikelyefforts of this nature would be carried very farperiod of this estimate. In the event nf aarmy would probably give greater attention toPKI influence In the country. )

almost certainly believes that Indonesiarely solely upon diplomatic pressuresromptof the West New Guinea dispute. In any case, hethe buildup of Indonesian forces in easternand the frequent use of threats of action. Wechancesegotiated settlement of the disputebetter than evenTjHowever, as Indonesianimprove, Sukarno will become Increasinglyemploy military measures short of an all-out Invasioneffort to weaken the Dutch bargaining positionpressure them Into meeting his terms forWe consider an all-out Invasion of West Newbe an unlikely course of action for the Indonesiansperiod of this estimate. )

he economic outlook for Indonesia over the next year or so is definitely unfavorable. The most serious problems will probably be the intensification of Inflation and thedecline of foreign exchange reserves. Sukarno is unlikely, however, to concern himself with remedialOn the contrary, continued economic frustrations will probably provide him an additional incentive to raise the pitch of the West New Guinea crisis. )

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DISCUSSION

INTRODUCTION

resident Sukarno's campaign against the Dutch to achieve control over West Naw Qulnea has alwaysajor factor ln Indonesia's domestic pontics and foreignpolicy. Sukarno feels strongly thatindependence will not be complete until "the liberation of West Irian" Is achieved and, over the years, he haa been able to project this attitude so skillfully that the West New Qulnea campaign haa acquired the statusational crusade. Sukarno has successfully used the emotional and nationalistic response on the West New Quinea issue to silenceopposition, to divert public attention from mounting economic problems, and to consolidate his position or leadership under the system of "guided deroocracy." In terms of foreign policy, Sukarno has come tolnguiah friend from enemy almost entirelyhe basis of policies and> acUona with respect to West New Qulnea.

n recent months. Sukarno haa moved to Increase greatly the intensity and urgency of the West New aulnea campaign. Theof his anticolonlalist propaganda Line was somewhat weakened early in 1MI byof Dutch readiness to move moreto prepare West New aulnea. for self-government. Later In the year, failures to gain solid Afro-Aalan support In UNon the issue confirmed Indonesianon this score and Increased their sense of urgencyesolution of the With the virtual cassation of therebellion and no immediate problems of governmental structure or political balance to divert his energies, Sukarno has been free to concentrate upon West New Quinea. Massive Bloc arms shipments have enabled htm to place increasing emphasis upon the

employment of military pressures forhis objective Accordingly, the West New Oulnea issue hu come to overshadow and to affect significantly all other foreign and do-mesUc matters.

developing their tactics,competing elements, the army andCommunist Party (PKI).their lead from Sukarno's reactionschanging course of the West NewIndonesia's faltering economyoverly ambitious Sight-Year Planhave Uttla claim upon the nation'sas compared with the wealtheffort being devoted to the Westbuildup. Moreover, Indonesia'sorientation for the next year orbe strongly Influenced by the degreeon this issue being providedby the major powers.

II. DOMESTIC POLITICAL TRENDS

Although Sukarno'shas been on the wane forhe retains two key assets lnhis controlling position: (a) aIndonesians stemming from hla roleleader and symbol of the Indonesianandonsummate skill inof individuals, groups,and Issues. Under his "guidedconcept, ho has eliminated thethe non-Communist parties andinstitutions ol representativeof all meaningful powers. of the political base has leftand the PKI aa the only contenderspower. Sukarno continues to beIn balancing the army and the PKIeach other while retaining forcontrolling power position.

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ht Army. The army has been involved In politics and In the administration ofparticularly7 when It became responsible for Implementation of the Martial Uw Decrees proclaimed to cope with regional dissidenee. Although several of the decrees have been lifted and Sukarno himself has taken over as Central War Administrator from Army Chief of Staff General Nasutlon. the army has continued to exercise wideat provincial and local government levels and to administer many Importantand business enterprises. Much of Its administrative and political effort has gone into competing at all levels with the PKI which it regards as the principal threat to ita authority and to the future of the country.

he army has strengthened Its pollUcal position during the past year. With the termination of the rebellions in Sumatra and the Celebes, the spilt betweenelements, which had weakened the army and divided Its leadershipas been ended. Surrendered rebel troops and many of their commanders are being Integrated into army ranks, mostly In Central and Eaal Javae PKI is strongest. There has alsoubstantial Improvement In the unity of the military services. Sukarno has replaced Air Force Chief of Staffro-Communist sycophant, with Dani. one of the air force leaders most acceptable to General Nasutlon. Nasutlon and Dani. along with Navy Chief of Staff Martadlnata, present an anti-Communist army-navy-alr force front for the first time, thus reducing Sukarno's scope for his common tactic of playing on divisions within the high command.may be replaced as Army Chief of Staff while remaining Minister of National Security. Even if this were to happen, he wouldcontinue to be the dominant military figure and to hold the support of the key army, navy, snd air force leaders, at least during the period of this estimate.

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Although Oeneral Nasutlonasic sense of loyally to Sukarno as theleader of the diverse trends within the Indonesian nation, he continuesresiston those issues which he feels vital to army interest. The army Is especiallyto any attempt to enlarge the role of the PKI In Indonesia's national life. Theof Nasutlon and his circle of key army leaders has deterred Sukarno fromof Communists to the Cabinet. The army also has been Instrumental In thepostponing ot thelections at which the Comrcu-nlata would probably have demonstrated their substantial voting strength. Cautionaryfrom the army has restrained Sukarno from overly Impulsive moves In his drive"military confrontation" with the Dutch. Finally, despite frequent Interference with these efforts by Sukarno. Nasutlon continues to encourage regional military commanders to harass the PKI by all legal and semilegal means The more zealous commanders have had considerable success In preventing the expansion of PKI Influence at local levels, and In disrupting their organisations and Jailing their leaders.

The current mobilisation for the West New Guinea campaign is absorbing anamount of the army's attention, leaving leas time for Its civilian administrative responsibilities and Its antl-PKI activities. By directing the army energies Into an "antl-impertallst" crusade of his own making,has at least temporarily deflected the army leadership from Its efforts towardreduction of PKI power. Nevertheless, the tide of public opinion stimulated byemotional approach to the West New Oulnea issue has obliged the army to go along with the President's views or risk beingfrom the people. By placing himself a: the head of the multiplicity or military and civilian staffs directing the current mobillza-

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agalnai the Dutch, Sukarno haa assumed the major role In military decisions which could have the most serious consequences for the armed forces.

Indonesian CommunistPKI has nearly two million membersthe possible exception of the army, Itmost influential single organisationpolitics. Moat of its strengthon the Island of Java, buthas been making progress Inand expanding its organizationouter islands, particularly Sumatra.wields its influence primarilynumber of nationwide front groupsorganisations, Including theand most effective laborand the largest peasantTlie PKI is strongly representedimportant body of the centralexcept the Cabinet. The partyits mass organizations and itsin government, to make Itselfto Sukarno. It haa.heen theilitant approach to the Westissue, thus playing uponand discrediting the army'sattitude. Its greatest impactforeign and domestic policies,Is probably through theumber of PKI leaders who, asSukarno's palace clique, have readyaccess to him. Thethe President and the PKIrest upon the conviction held by eachis using the other to Its own advantage,

PKI does not appear, however,increased its Influence, prestige,strength appreciably overyear. It has not been able toIndonesia's chronically poor, andeconomic conditions because of itsof Sukarno. Certain recent eventsthat there may be significant limitsability to carry out disruptive activity.

For example, the PKI instigated waves of strikes and demonstrations during theand fall, but when the army met these moves with firm and forceful measures, lt soon became apparent that the PKI rank and file had little enthusiasm for exposing Itself.

There have been reports ofwithin the PKI with the leadership of Party Chairman Aldlt and with the party's policy of supporting Sukarno and seeking to expand PKI influence through legal political means. The position of these dissenters haa probably been strengthened by the weak showing of the PKI in last year's strikes. There are also signs that Slno-Sovlet disputes over tactics appropriate to Communist parties in underdeveloped countries have beenwithin the Indonesian Party. The PKI, which hitherto has appeared to receive most of its support and external guidance from Moscow, was disturbed by Khrushchev's pronouncements on Albania and Stalin at the Soviet Party Congress and, by Implication, associated Itself with Chlneae Communist views. If the party should fall generally under Chinese Influence, an effort would be made to displace Aldlt and the party would probably turn toward more revolutionary tactics.

However. It la unlikelyhange in PKI policy, even if lt occurred, wouldsignificant effects during the period of this estimate. It is unlikely that anysegment of the PKI would be willing to adopt an anU-fiukarno stance so long as West New Qulnea remainsrofitable issue. Furthermore, the events of the past yearthat the PKI la not ready to embark activelyard lineonsiderable period of preparationhange of tactics. In addition, the PKI would approach open revolutionary activity with caution in view of Its disastrous experience ln the Madiunof 1MB.

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s long as ths West New Ouinca crista continues at Its current Intensity, the PKI will be alert to exploit the opportunities afforded tor infiltration of the Indonesian armed forces, foredge between Sukarno and the military leaders, and for estranging Indonesia and the West Tothese opportunities, the PKI willcontinue toegotiated

he Non-Communist Parties. The power and influence of the non-Communist parties have continued to deteriorate during the past year, and approach Insignificance. They are essentially parliamentary parties and in the absence of elections they lackeans of demonstrating the extent of their papular backing, and an incentive to solicit and maintain such backing With each passing year, the fact that they can pointertain number of proven supporters In the last) becomes less meaningful,0 Sukarno banned the Socialist <PSI) and Masjuml parties which, deprived af patronage and legal status, are disintegrating rapidly. The two remaining major non-Com-munlsl parties, the Nationalists (PNI) and the Islamic Scholarsave survived by subordinating their own policy viewa to those of Sukarno, but neither one exerts any real influence. The army has shown some Interest in cultivating certain political party leaders with an eye to utilizing such organizational machinery and mass loyalty as these public figures retain.

rospects. Although lt Is unlikely that the basic elements In the Indonesian political situation will-change significantly over the next year or so, the course of the West New Guinea dispute will modify the balance of power between Sukarno, the army, and the PKI. Should the armed forces sustain amilitary setback In operations against the Dutch. Nasutlon and his top commanders wouldoss of suture In the govem-

6 ment and it would probably become more difficult for the army tu Influence Sukarno and to pressure the PKI. The PKI, for Its part, would not hesitate lo exploit any army failure In order to Improve Its own relative position.

A settlement of the West New Guinea dispute would, at the start, enhance theof Sukarno and of the PKI as well.onger period, bath would suffer from the disappearance of this issue and would seek other causes to support. This would be of particular concern to the PKI, since the army, relieved of the New Guinea preoccupation, would be more free to reassert Its opposition to Communist influence in the country. It Is unlikely that either Sukarno or the PKI would give major attention to constructive efforts to cope with Indonesia's pervasive and intractable economic problems. Instead, they would probably look for new subjects ofThese would probably have an "antl-colonlallst"arassment and further reduction of Western Investments Inor Irredentist propaganda campaigns against Portuguese Timor or British Borneo. During the period of this estimate, however, it Is unlikely that any efforts of this nature would be carried very far.

Effects ol Death or Incapacitation of Sukarno. In the event of Sukarno's death, the army and the PKI would find themselves In direct confrontation with regard to theSukarno's current arrangements for succession to the Presidency provide that the office be rilled by the First Minister (DJuanda) and the Deputy First Minister (Lelmena) In that order. Both of these Ministers and their close associates would probably be amenable to working fairly closely with Nasutlon and the army upon whose support they wouldfor the stability of their administration. Nasutlon would probably be content tohis predominant influence behind the scenes as long as the civilian leadership met

political gains In officer ranks. This wariness of Soviet Influence Is likely to continue, at least during the period of this estimate.

espite the vast Bloc arms .tales tothe bulk of Indonesian tradeto be with the Free World. The Bloc accounted forercent of Indonesia's total foreign trade ln the first halfrincipallyustomer for rubber; thisUght decline90 After Malaya/Singapore, tho US la the moatcustomer for Indonesian exportsrubber, tin, andhe second largest aupDller ot Imparts after Japan.CI

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estern oil and plantation in-terests ln Indonesia are still extensive despite continuing government restrictions on foreign operations and Investments.

economic outlook for Indonesianext year or so isEight-Year Plan, which began, haa gotten offlow startln any case be expected to showSukarno appears to have utileIn or comprehension of economicand he is unlikely to follow aof stabilisation and retrenchment.reacts politically lo economicFor example, the deterioratingsituation gave htm an incentive topitch of the West New Guinea crisisand economic frustrations willlead him to further harassment ofinterests

IV. FOREIGN RELATIONS AND PROSPECTS

the past several years, SukarnoIndonesia's neutralist policy slowlythe Bloc position on all majorissues. Soviet military aid andBloc political and propagandathe West New Guinea campaign, moreother factors, have drawn Indonesiaclose relationship with the Bloc.leftward drift has alsoesult of hla dlssppolntment with the absence of neutralist support for his West New Qulnea crusade at the Belgrade conference and his earlier exclusion from the Tito-Nasser-Nehru talks ln Cairo. There isuch-Improved relationship with Communist China, asto the strained situation whichonly two years ago, and closer official contact with North Korea and North Vietnam.

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egotiated settlement Is reached on the West New Quinea issue, someln Indonesian relationships with the West la

"Tllnwever, Sukarno's continuedeadership role will probablya continuation of Indonesia's pro-Bloc orientation in Internationa) affairs, if tbe West New Quinea dispute enters the stage of open hostilities, lt is likely that Indonesia would become further alienated from the West and progressively more dependent on theatates Inituation.voices in the armed forces would become silent and Sukarno would move even further into the "socialist camp."

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attemptubstantial operation until they have achieved air superiority over the waters off theseituation not Ukaly to exist before the end of this year. The possibility cannot be excluded, however, that Sukarno might order such an operation at an earlier date either In exasperation or in an effort to force the Dutch to the conference table.

3fl. An all-out attempt to take West New Guinea by military action would necessarilyarge air and amphibious assault on DIak, the primary center of Dutch military power. The Indonesians can now easily musterroundand the airlift which would be required, but waterllft capabilitieseriousAbove all, the long sea voyage involved would make prior neutralization of Dutch sea and air strength based at Biak necessary If the Invasion convoy were to reach itsAlthough Indonesian military strength will continue to Increase, we estimate that they will not achieve the capability forcarrying out such an operationthe period of this estimate. Weregard an all-out invasion of West New Guinea as the least likely Indonesian course of action over the next year or so.

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