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Every historical milestone reflects the end as well as the beginning of an era, and since history is continuity in spite of change, so the beginning of an era is never a complete disengagement from the past, either materially or mentally. Such is the case now in Indonesia.
Within her short history as an independent nation Indonesia has experienced systems of government, political outlook and conduct which were more than merely different; they were contradictory. But during both those decades one man remained at the summit of the Indonesian political scene: Sukarno. His character is by no means easy to describe because of its many ambiguities. He is a man who loves the mysteries of the night's darkness, but none the less can enjoy the freshness of a bright day; who knows how to add flavor to protocol by breaking formal rigidities with touches of human interest; who smiles or snubs as he expresses his vivid joys or sorrows to others; who sometimes reveals the positive attitude of an exact scientist or, again, the intuition of an artist; who knows how to saturate the masses with emotion and hold them spellbound, but also how to control them with a minimum of gestures. During serious discussions of problems with his ministers he could appreciate humorous interruptions by high officials in the role of court jesters. My personal recollection of him is of a man rich in ideas and imagination and direct in both his sympathies and antipathies; in short, an unforgettable character.
In spite of the mistakes which Sukarno made during his period as President of the Republic, he succeeded in making himself a rallying point for the Indonesian people in general. It was not easy to build up a leadership image in a polyethnic country like Indonesia. We must admit Sukarno's skill in developing his image as Supreme Leader of the Indonesian Revolution, Extension of the People's Tongue, Bearer of the Mission of the People's Suffrage and so on. He was able to discredit any politicians who did not share his political views. Orders to jail anyone who opposed the President hung like a sword of Damocles above the heads not only of politicians but of intellectuals and artists, indeed anyone and everyone who was in disagreement with him.
The atmosphere of threat and insecurity became more and more oppressive during the years 1959-60. That was the period in which, with Sukarno's encouragement, the Communist Party (the P.K.I.) gained its great influence in Indonesian politics. The Institution for Building up the Revolutionary Spirit was established to compose the ideas, speeches, slogans and symbols which were to be spread out through the entire nation by means of courses in building cadres, by discriminatory upgrading and downgrading of officials and by mass rallies, campaigns and drives. The Institution's aim was to indoctrinate the Indonesian people with the belief that what Sukarno said was always right and wise and that the body of his teachings actually incorporated undeniable and absolute truth. An order was issued to all newspapers, weeklies and monthlies to reserve columns for the coverage of "the teachings of the Supreme Leader of the Revolution Bung Karno," and they had to comply or be accused of subversion and counterrevolutionary attitudes.
The climate came closer and closer to madness, yet an old discredited politician, quoting Hamlet, remarked "how much system there was in this madness." The idea of revolution, the unfinished revolution, justified any and every sudden change in political behavior. It also justified Indonesia's unpredictability in changing allies and foes in its foreign relations. Similarly, staggering economic conditions had to be accepted as necessary for the sake of building the nation. Nation-building and national identity were the slogans, and they were driven to the point where xenophobia was not just permitted but nourished.
Typical of Bung Karno's views was his speech of August 17, 1959, known as the Manifesto Politik, abbreviated to "Manipol" and later ideologized as "Manipolism." One sentence read, "The whole strength of the people must be canalized into one vast wave of energy . . . into one irresistible wave of heave ho and pull together" ("Ho lopis kuntul bans"). It was a period of collective hypnosis. The mass motto of "heave ho and pull together" soon became institutionalized in the form of the Front Nasional in which the P.K.I. was definitely given the role of directing the course of Indonesian politics. Its success was due not so much to any majority this National Front possessed or might possibly gain, but to the protective hand of Sukarno who was, alas, its Chairman. Mainly because of this the P.K.I., a minority, assumed the quality of a majority. Some elements tended to coöperate with the leftists at least partly out of loyalty to "Bung Karno" and his teaching that "the Indonesian Revolution is a leftist revolution."
Bung Karno's absurd "Nasakom" concept, resulting from his early studies of Marxism, Islam and Nationalism, became (or was made) a political credo which every political party had to accept as beyond criticism. On it he intended to build a stable political platform in Indonesia, even in the whole world, as indicated in his statements following the abortive communist coup of September 30, 1966. Even in the traditional August speech which he made in the summer of 1966 he played with the idea of reviving the Nasakom concept (although he cautiously changed it to "Nasasos," abbreviating Sos from Socialism, and making it more vague by adding "plus whatever sort of Nasa it may be"). That speech was actually the point of no return in the split between Sukarno, protector of the Communist Party, and the anti-communist masses led by students and supported by other political groups.
The Provisionary Consultative Council of People's Representatives has now declared Communism/Marxism-Leninism a forbidden ideology in Indonesia and the P.K.I. has been banned. Months before this decree was issued masses of students and militant youths painted the walls of Djakarta with cynical and insulting statements regarding the P.K.I. and the Nasakom idea. In some places new meanings were given to the term Nasakom, e.g. Nas(ution) A(mbil) Kom(ando), meaning "Nasution, yours to command." Political interpreters explained that the reference to General Nasution really meant the armed forces.
General Suharto has moved patiently toward a settlement of the political conflict which followed the abortive communist coup, showing his good will in trying to solve it as peacefully as possible. His intricate and sensitive efforts, conducted by gradual phases, caused a certain amount of confusion and speculation, especially among foreign observers. A comparison might with some reason be made between his methods and our traditional Indonesian shadowplay; but the fact remains that national problems cannot be solved in complete detachment from the prevailing intellectual and cultural climate. It was not hesitation or reluctance that slowed the procedure adopted by General Suharto so much as the complicated character of the person being dealt with. The nuances of feeling and intuition hidden in that introverted personality presented many riddles and required delicate manipulation.
Such was the picture in 1966-a blend of uncertainties and hopes. A new leader had been given to the nation, but the old leader still struggled to postpone his defeat. He was a leader of the past, and his decline and eventual defeat were an historical necessity. Simultaneously with his decline there came into being a new generation aware of its responsibilities. This new young generation had been frustrated by prolonged suppression, but in spite of terror and threats had determined, in a spirit of l'amour de risque, to start a history of their own. Calling themselves "Generation-66," the second generation since "Generation-45" to have political significance, they have today become a pillar of the New Order in Indonesia. It is their merit that they were the first to make sure that the New Order was not to be degraded into a mere slogan and to insist that it be given meaning as a new social and political way of life based upon the Constitution.
It is to be hoped that students and intellectuals can continue to contribute to the country's development. They will do this effectively only if they can keep their momentum and at the same time adjust themselves to changing conditions and changing demands. To be useful, they should adapt their methods of struggle to the shifts in aims and objectives as Indonesian society develops. This will not be easy, but it can be done, and I am convinced it will in fact be done in the long years of social, economic and political reconstruction that lie ahead.
"The freedom of assembly and association, of expression of spoken and written opinion, shall be provided for by law," says Article 28 of the Constitution. It sums up the main mission of the New Order: to restore democracy. This is not as easy as many Westerners think. Five to six years of brainwashing and indoctrination have left their traces in the minds of many, even those who are in principle on the side of the New Order. Some fear the consequences of restoring democracy, while others are still under the influence of the political prejudices and poisonous effects of prolonged indoctrination. Time will be needed for complete recovery.
Both Indonesia's leaders and policy-makers and the Indonesian people as a whole must persist in the determination to realize the ideal of true democracy. Unless the New Order succeeds in this mission it is doomed to degenerate into mere sloganism. It was born as a response to the challenge of tyranny and terror, and it must maintain that challenge against all forms of absolutism or dictatorship. The system most suitable for governing our widespread archipelago is that of a unitarian democratic republic. Retrogression to a dictatorship ruling by the old methods of force and intimidation would end inevitably in the disintegration of the Indonesian state.
The question now is whether or not the democrats of Generation-66 will be able to restore full confidence in democratic institutions and solve our national problems by the democratic means provided within the context of the Constitution. Those in positions of responsibility in the government administration and the armed forces, and the leaders of political parties, must realize that Indonesia's problems will not be solved by mere exchanges of abuse, by accusations and counter-accusations or by making scapegoats of opponents.
In most countries when the military takes over the running of the government its first act is to abolish or distort the Constitution. This has led to questions being asked about the possibility that the political leadership of the armed forces represented by General Suharto will follow a similar course. The answer to those questions is no. In our case, the armed forces have committed themselves to restore a constitutional government and to revive the democratic spirit. General Suharto and the armed forces have assumed the solemn duty of fulfilling this. I am convinced that General Suharto wishes to do so, as do also, I hope, all the top military leaders. If all who belong to the New Order are aware of the responsibility they share to restore democracy, then the year 1966 will have become in fact a milestone of Indonesia's coming of age socially and politically.
It is over a year now since the government started tackling its economic problems seriously and systematically. Substantial progress has been made in controlling inflation, but the economy is still suffering the after- pains of the drastic operation; at best it can be described as being in a state of convalescence.
In October 1966 the government began to correct the ubiquitous controls and gross errors in the allocation of funds which had prevailed in the past and had finally produced a runaway inflation. All unproductive spending on monuments and prestige projects was cut off. Foreign trade was freed from the unrealistic exchange controls which had handicapped exports and made imports cheap for those who were lucky enough to procure licenses. Exports and imports were for the first time given a floating exchange rate to protect foreign trade in the still existing inflationary conditions. The very high export taxes concealed in the foreign-exchange regulations were substantially reduced.
During that last quarter of 1966 the government also approached creditor countries, to which it owes more than $2.5 billion, in an effort to secure a rescheduling of current debt obligations. Intergovernmental groups met successively in Tokyo and Amsterdam to discuss the problem. Impressed by the Indonesian Government's serious intention to put its own house in order, they agreed to reschedule current debt obligations and to furnish $200 million to support the budget and to ease our balance of payments in the first year of the stabilization effort. The government insisted that these fresh loans be given in the form of multi-purpose commodity loans, primarily to support the budget rather than to finance projects. This form of international aid is not common, but fortunately the creditors agreed to it. In all of this, the assistance and counsel of the International Monetary Fund were invaluable.
The government also submitted to parliament a budget in which expenditures and revenues (inclusive of foreign aid) were in balance. It had been a very long time since an Indonesian government had presented a balanced budget, or indeed a well-prepared budget of any sort. Although the government had no illusions that a rigid balance could be maintained throughout 1967, it was determined to introduce budgetary discipline, begin setting new rules for sounder budgetary practices and make sure that government budgets should no longer be the source of inflation as in the past.
A new round of economic measures was undertaken in February 1967, this time aimed at abolishing subsidies to public utilities and national oil companies; unless this was done, the budget would never be in balance. The cost of gasoline, kerosene and diesel oil went up eightfold and, partly as a consequence, public utility rates had to be raised twentyfold in order to break even. These rate and price adjustments were a severe shock to the economy and inevitably had political repercussions, but there seemed no alternative.
Since then the economy has been painfully trying to accommodate itself to the new rules and to move from hyperinflation and excessive government controls to a more stable market economy. The rate of inflation is still 65 percent per year, but the government is avoiding price and foreign-exchange controls in an effort to make the policies stick.
The ordeal of stabilization is being widely felt. The deflationary forces resulting from reduced government spending and from higher transportation costs and public utility rates have brought hardship to many of our still- infant domestic industries. The high priority accorded to exports and the increasing stability of the currency have already produced a stream of imports; the "empty-shelves economy" of the past is over. This means that domestic industry still has to make further painful adjustments to the new competitive situation.
In the final analysis, the success of the stabilization and rehabilitation program depends on our obtaining sufficient foreign aid. Budget expenditures had to be cut substantially in the past year due to shortfalls in foreign aid receipts. Instead of $140 million worth of development expenditures, only $95 million will have been spent. As a result, the government could carry out only the most necessary road repairs and complete one or two high-priority agriculture and irrigation schemes and certain industrial projects already long under construction.
The 1967 budget for salaries was very inadequate. The total sum available for salaries, to be distributed among some two million employees, the armed forces included, amounted to only $240 million. The average salary per government worker thus is about $120 per year. Low wages create a temptation to government employees and others to make up the difference between their salaries and the minimum necessary for subsistence for themselves and their families by taking second jobs or by various devices, legal or illegal. This poses a problem which only the capacity to raise salaries gradually can bring under control.
The salary scale in 1967 represented an improvement over the preceding year, and the reduced rate of inflation adds to the protection of persons with fixed incomes. Nevertheless, a further improvement is vitally necessary. The new regime has put great stress on bettering economic conditions. Although it is not giving the people rosy promises, it nevertheless is creating expectations. In 1968, a pre-election year, the new régime will be measured above all by its performance on the economic front.
The government enjoys several obvious advantages in dealing with its problems. General Suharto has given it determined leadership; major political dilemmas have been solved with tact and without creating unnecessary turmoil. It has struck a happy balance between continuity and change. Its major support is the military establishment, at the moment the strongest political entity in the country. A broad consensus exists about the general direction in which the New Order should move even though there is ample criticism of the way specific changes are being managed. Meanwhile the opposition is not very vocal and is not well organized. All this makes for a relatively strong government with good chances for survival. The fact remains that the régime has to score substantial successes in the economic field; it has to "deliver the goods."
For the fiscal year 1968 (which coincides with the calendar year) we need a larger budget in order to permit improvements in salaries and larger investments in development. Our first effort will be to cover routine expenditures by raising domestic revenues some 27 percent in real terms. If we can achieve this, it will be the first time in Indonesia's history. In addition, in order to cover a higher development budget, we need increased foreign aid, if possible the equivalent of $250 million in the same form as the past year-that is, multi-purpose commodity aid.
Outside the regular operating budget, we will introduce direct project aid in the form of equipment and capital goods, mainly to rehabilitate infrastructure projects: roads, harbors, rivers, railways, generating plants, airways and irrigation facilities. None of these has had proper replacements since 1961 and most are in very bad repair. Thus 1968 will be an "infrastructure year," aimed at repairing facilities in order to revive the economy, boost exports and lay a more solid foundation for the long- range development which we intend to start in 1969.
Ideally, we hope aid may come from the United States in the calendar year 1968 in the amount of $50 million under Public Law 480, $50 million in the form of commodity credits and, say, $30 million in the form of capital goods for rehabilitating the infrastructure. Since we are a nation of 110 million people, such governmental aid would amount to a little over $1 per head. By comparison with the $65 million of American aid in the current year, the new figure might appear too hopeful, but if it is enough to bring stability to a vital region of the world it could be considered a modest investment.
In addition to governmental aid, Indonesia is hoping for a good measure of American equity investment. Our foreign investment policy is an integral part of our overall economic and development policy. The law passed as a high priority measure in parliament as early as the last quarter of 1966 provides ample guarantees against expropriation and undue government interference in management. It provides also for the free transfer of profits as well as legitimate costs such as expenses for patents, royalties, insurance and part of the salaries of expatriate employees. After the tax holiday is over, repatriation of capital will be allowed. Indonesia's great natural potential and its large domestic market can be developed effectively by private enterprise, and in this foreign capital can play a very important role. The government will confine itself to investments in roads, harbors, rail transport, communications, agriculture, schools and other requirements for social development and will leave the rest of the economy open to the initiative of private enterprise. The government also realizes that since it cannot count on the flow of foreign aid capital continuing indefinitely, self-help measures are necessary to mobilize the domestic capital which will one day have to take over the role now being filled by international aid.
In developing countries, however, foreign equity capital should work in a coöperative manner with the host society. Foreign investment must become a truly international venture; that is, it must produce a blend of Western technology and management with local human and social capacities. Trouble comes if foreign investment creates isolated islands of modernity in an underdeveloped native sea. Along with the influx of foreign capital we have to develop an indigenous middle class, which in time should be as strong as the foreign business class, indeed preferably stronger. This is imperative if we want to preserve social and political stability. In Indonesia there is as yet no strong and established middle class, save for the semi-alien Chinese business community. That is why the government prefers joint enterprises or joint ventures rather than foreign investments which remain fully controlled from abroad; but because of the scarcity of Indonesian capital and entrepreneurs it will not insist on these in the beginning. We want to develop indigenous entrepreneurs through education and employment, and for this purpose foreign enterprises are required to train Indonesians and employ local skills to the extent they are available.
We must give evidence of progress toward maturity in our handling of international as well as national problems. In our foreign relations, I regret to say, policy-makers of the past regime destroyed much good will or at the least did not respond adequately to evidence of it. The task of the Indonesian Government now is to regain the confidence of some of the nations which have experienced mistreatment by our predecessors. It will make every effort to restore relations with other nations in the Indonesian people's genuine spirit of good will, so long suppressed.
We believe that no nation in this age of rapid technological progress and scientific advances can live in isolated self-sufficiency. Even if for the time being we put more stress on our domestic problems, we are aware of our role among the other nations of the world. The fact that so much has to be done at home to improve social welfare and develop natural resources does not indicate any lack of interest in foreign affairs.
Indonesia's main problem today is to reëstablish her position as a respectable and respected nation based on a policy described usually as nonalignment. This means that Indonesia will not become a member of any international bloc, either political or ideological. It does not mean, however, that Indonesia will take up an attitude of indifference toward world problems and world conflicts. Indonesia will join with other nations to promote world peace and good international relations. I must admit that our good will has not as yet been fully reciprocated; policies of the past régime have left a certain residue of mistrust abroad. That is why I am making it my mission as Minister of Foreign Affairs to regain what good will we may have lost, not by promises but by proving Indonesia a reliable partner in political as well as business matters.
In this context we are working toward the establishment of regional coöperation in Southeast Asia. The initiative is not a new one. The Asian nations, and especially those of Southeast Asia, are aware of the necessity of coöperation not just for political ends but for the sake of mutual development. The exchange of experience in nation-building in a world of rapid social change and technological progress is fruitful not so much because one can copy from another as because a comparative analysis can prevent the repetition of mistakes.
The primary reason for regional coöperation is the necessity for modernization. The developing nations themselves have the primary responsibility for accelerating the speed of their recovery and improving their standard of living. Yet other more developed nations have a duty to help on ethical grounds. Today national leaders must consider the good not of their nations but of humanity in general. The cultural differences among the peoples of the world present problems of a quite secondary order compared with the problems arising from the discrepancies in the basic needs for human survival. Especially in our region, the question of war or peace is not the only problem. There is a desperate struggle, too, against poverty, disease, illiteracy and many other ills. It is a struggle which can be won if the will exists, by which I mean if the nations of the world will pay enough attention. With this in mind we look on the establishment of regional coöperation in Southeast Asia as part of, and in harmony with, international coöperation in general, the overall object being to improve our standard of living and our intellectual capacities so that we may keep pace with modern progress or at least not stay too far behind.
In view of the tremendous growth of the idea of regional coöperation, which resulted in the establishment of the Association of Southeast Asian Nations (ASEAN), it might seem logical that part of the foreign aid given to Indonesia or other countries in the area should be diverted to multinational regional projects. The fact is, however, that the aid given directly to Indonesia or other countries of the area is much smaller than their needs. Because of this, and also because aid varies in kind and purpose from country to country, a diversion of any part of it does not seem feasible without curtailing the programs already under way. Such aid as might be provided for multinational regional projects ought not to interfere, therefore, with what is given to national economic programs.
No Asian country can detach itself from anything that happens in Asia. Although Asia is composed of many nations, with varieties of culture and political and ideological outlook, every part feels the pulse of every other part. The Chinese Cultural Revolution is an Asian problem, as the Viet Nam war is also a problem for other parts of Asia. The same is true of the industrial progress of Japan, which affects certain aspects of the national economy of other Asian nations. But in a general way we can almost say that the Asian problem is caused mainly by the fact of transition- transition from traditional society toward a modernized society, from colonialized nations toward independence, from more or less tranquil isolation toward international involvement. Nor are the problems involved rational only; some of the inhibiting factors are basically emotional in nature. Psychologically, the situation can be stated in terms of a traumatic experience-the attempt to achieve self-responsibility in a community of nations where interdependence is a must.
The idea of regional coöperation is not, of course, inconsistent with coöperation with other nations in the world, and for this Indonesia believes that the United Nations is indeed the most suitable forum. Since its establishment in 1945 the United Nations has undergone drastic changes in nature and structure, for the world itself has changed, and many problems not foreseen in those early days of postwar fatigue and hope have arisen as results of new conflicting forces and ideologies. It is not enough to blame each other for the present sorrow in the world. We are all to blame, and each will be blamed by tomorrow's generations unless each does his share to end it.
To those nations which belong to the family of the affluent I would like to make an appeal: transcend limitations of national or local interest and dismiss feelings of superiority. The relationship of the affluent and the impoverished but developing societies must not be based on such assumptions and cannot be contrived by political manipulation. The better world we hope for will be inhabited by men possessed of their full dignity and rights and conscious of their plain duty. To fulfill that hope should be the ethical purpose of the United Nations, which is the institutionalized manifestation of the society of man.