THE VIEW FROM INDONESIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00353R000100040001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 15, 2016
• Document Release Date: July 8, 2004
• Sequence Number: 1
• Publication Date: April 8, 1974
• Content Type: MEMO

Approved FL Release 20041021IG CIA-RDP25
100040001-1
CENTRAL INTELLIGENCE AGENCY
WASHINGTON, DC. 20505
8 April 1974
OCT No. 1326/74
SUBJECT: The View From Indonesia
Indonesia's military leaders were badly shaken
by the urban violence that broke out in Jakarta during
Japanese Prime Minister Tanaka's visit in mid-January.
They have closed ranks behind President Suharto to
present a united front to critics of the regime, par-
ticularly students and intellectuals. The top command-
ers fear that evidence of indecision by the government
could lead to a revival of Communist influence. At the
same time, many civilian and military officials have
doubts about present government: policies, and renewed
signs of social tension would undoubtedly revive ques-
tioning of Suharto's leadership.
Clouds on the Horizon
Expressions of increased concern over the course
of the government during the latter half of 1972 were
accompanied by student protests and rumors 'of politi-
cal rivalry among top generals close to Suharto. Criti-
cism focused on development programs and economic
planning. Although the First Five-Year Plan (which
ends in April) has achieved many statistical goals,
such as increased production and exports, critics
charge that accomplishments have fallen far short of
social requirements. The average Indonesian has bene-
fited little. Agricultural aid aimed at the relatively
well-to-do farmer, rising food costs, and a mismanaged
distribution system have left many worse off than
before. Greater availability of consumer goods has
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only emphasized the conspicuous consumption of the
military elite.
President Suharto's actions since the January un-
rest have been directed more against the critics than
against the problems. He evidently believes that gov-
ernment permissiveness encouraged political provoca-
teurs and mischievous students to make trouble. He
has reacted by clamping down on dissent--arresting
critics, closing newspapers, and prohibiting further
discussion of "socially divisive" issues. Suharto
has also moved to quell criticism from within his
government by asserting a firmer personal grip on the
military and civilian bureaucracies. He has reshuffled
personnel to ensure that key positions are held by men
personally loyal to him. As part of this reorganiza-
tion, General Sumitro, long considered the second most
powerful man in the regime, has resigned and the posi-
tions of his supporters are in jeopardy. Sumi.tro's
departure has not completely cleared the air..' Not
only is there no longer a recognized heir apparent to
Suharto, but also speculation about Sumitro's possible
political ambitions has intensified.
Both critics and supporters of Suharto are hanging
fire at present awaiting a government reorganization
promised for April. Although the exact nature of the
planned changes is unclear, various figures in the
regime have hinted that it will affect both the civil-
ian bureaucracy and the military establishment. Presi-
dent Suharto has promised that the Second Five-Year
Plan will concentrate on projects of benefit to the
people and will make the nation less dependent on
foreign assistance and advice. lie has already announced
some essentially cosmetic changes designed to meet criti-
cism about the high living of government officials.
Student leaders have stated their .intention to resume
public protests if the promised changes do not meet
their demands.
The Ugly Japanese and Other Foreigners
Much of the public protest has centered on anti-
Japanese feelings. While it is true that Indonesians
generally find Japanese business practices more objec-
tionable than those of other foreigners, in,a broader
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context the Japanese have come to symbolize a whole
variety of economic grievances. Many Indonesian leaders
believe that the country's natural resources make it
an object for exploitation by industrial states. The
Japanese attract the most attention because the Jakarta
skyline has become crowded with garish neon signs ad-
vertising Japanese goods and also because Japanese
tourists and businessmen travel in conspicuous, well-
knit groups that tend to remain isolated from Indonesian
society.
Critics charge that foreign economic interests and
Western-trained advisers have too much influence in
determining national policy. Important government offi-
cials, such as General Ibnu Sutowo who heads Pertamina--
the national oil monopoly--also subscribe to this view.
It is likely that Jakarta will begin displaying a more
independent and self-confident posture in its dealings
with foreign governments and businesses. Ibnu argues,
with some reason, that Indonesia can finance more of
its own development because of its vastly increased oil
revenues. Ibnu and others charge that Indonesia's
present problems are in part the result of poor plan-
ning by its stable of Western-trained technocrats, and
he would like to see their power curtailed. There has
been some speculation that Suharto's reorganization of
his government in April will either remove some techno-
crats or restrict their authority.
Even if Suharto decides to sacrifice some of the
technocrats in the interests of "Indonesianizing" his
development programs, he will not have solved all of
his problems. An important ingredient in the recent
resurgence of anti-foreign sentiment was resentment
against the predominance of Chinese-Indonesian business-
men in the economy and their cozy relationships with
both military leaders and foreign investors. Anti-
Chinese sentiment is never far from the surface in
Indonesian society, but students and other critics
have managed to create in the public mind the image
of an unholy alliance among Chinese businessmen, foreign
investors, and corrupt generals and to make this alli-
ance the scapegoat for much that is wrong in present-
day society. Recent changes in foreign investment
regulations are aimed at reducing the influence of
ethnic Chinese. Foreign investors, however, may now
have difficulty finding local partners with, sufficient
capital to participate in joint ventures.
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Ambitions for Regional Leadersh_
Jakarta is pursuing an active regional foreign
policy with emphasis on the Association of Southeast
Asian Nations (ASEAN)--Malaysia, Singapore, the
Philippines, Thailand and Indonesia. Regional coopera-
tion has been expanded to include mutual consultations
on intelligence matters, particularly regarding over-
seas Chinese; on foreign policy approaches both to
Communist nations and within Third World forums; and
on economic issues. In addition, Jakarta has tried
to persuade its ASEAN colleagues to develop a plan
for mutual defense, including joint training exercises.
As part of its desire to be regarded as the elder
brother among Southeast Asian nations, Indonesia has
sought support from important Western states, including
the US and Australia. it considers its selection to
the ICCS in Vietnam and the Middle East peacekeeping
force to be world recognition of Jakarta's importance
as a responsible and stable power. Although Indonesia's
Southeast Asian colleagues occasionally chafe at its
ambitions for leadership, they also value Jakarta as
a regional mediator. Indonesia's foreign minister Adam
Malik, for example, has been active in trying to pro-
mote a solution to the continuing friction between
Malaysia and the Philippines that arose out of the
Muslim insurgency in the southern Philippines.
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