FROM a military point of view the Indonesian rebellion which began in February seems to be over. True, most of the leaders of the "Revolutionary Republic" are still at large, hiding in the jungle or in exile. Guerrilla warfare may continue for some time. There may even be sporadic air raids by rebel-hired planes. But effective rebel resistance to the regular armed forces broke down almost as soon as the Djakarta government decided to fight. It is not likely to reappear now.

Meanwhile the basic economic and political problems that gave rise to the rebellion are more serious than ever, and the resort to force has aggravated the underlying grievances of the people in the outer islands against the central government. The government leaders now face the delicate and difficult task of unifying the country, finding a way to provide stable government, and developing the economy in a manner satisfactory to all major groups. If they succeed within the next year, Indonesia can hold her elections in the fall of 1959 with every hope of moving towards "mature democracy." If they fail, they will probably prove to have lost Indonesia her last chance to choose a non-Communist path of economic and political development.

The United States Government and American enterprises in Indonesia steadfastly refused to support the rebels despite their anti-Communist and pro-Western complexion. Perhaps they assessed the chances for the success of the rebels more accurately than these did themselves; perhaps they feared that intervention would create another "Spain," a battleground for the major Powers and thus the beginning of World War III; perhaps they felt simply that to support the legally constituted government was the right thing to do, even if many friends were on the other side. Whatever the reason, the policy will have proven wise in the long run if the West follows through by helping the Indonesian Government to eradicate the causes of the rebellion and to get on the road to becoming a unified nation with a stable and progressive economy.

Why did the revolution fail? How could the revolutionary leaders, men of high caliber and with wide and deep knowledge of Indonesian politics, make such disastrous errors of judgment? They were not altogether unreasonable in thinking that they had a chance, but each of their "reasonable" assumptions went wrong. First, they assumed that their leadership would remain united; it did not. Some of those who organized the economic and political resistance to the central government were opposed even to the declaration of an independent revolutionary government. Frictions arose between the military and civilian leaders as well. Second, they assumed that Barlian, Commander of the South Sumatra district, would join them; he did not. Third, they thought former Vice President Hatta and the Sultan of Djogjakarta would support them; they declined. Fourth, they thought that the oil companies would divert their foreign exchange earnings to the revolutionary government, which in return would grant them the oil concessions they had so long been seeking; they refused. Fifth, they thought that the financial position of the Djakarta government was so weak that a squeeze on foreign exchange and tax receipts would bring Djakarta to its knees without any need for fighting; they were wrong. They expected more mass support than they got. Finally, they expected effective assistance from the Western Powers to whom they were friendly; they failed to get it. The revolution might have withstood disappointment on some of these assumptions, but it could not survive being wrong on all of them.

II

Our problem now is to bring Indonesia back to a position of "neutrality in our favor," and the task is by no means hopeless. The majority of the people are still non-Communist. Indeed, anti-Communism has hardened as the strength of Communism has grown. The P.N.I. (Nationalist Party) has thought better of collaboration with the P.K.I. (Communist Party). President Sukarno has recognized that Communists are not easy to use for purposes other than their own and indicates that he can be brought back to the same frame of mind which he held following his visit to the United States in 1956. The recent Cabinet reshuffle constitutes a demotion for several presumed "fellow-travellers." There are still able leaders with whom to work. General Nasution himself, as Chief of Staff, has emerged from the fighting in a strong position, and thus far he has given every indication of being a staunch anti-Communist as well as a resolute foe of corruption and incompetence in government. Prime Minister Djuanda is by no means hostile to coöperation with the West. The new Governor of the Central Bank and the Minister of Finance are capable members of the moderate, relatively pro-Western group. But if these and other factors are to be utilized to save Indonesia for the West we must offer her substantial aid and comfort in both the economic and the political spheres.

Helping Indonesia economically will be easier now than it was in the past. For while the revolution has been a disaster in most respects it has had one beneficial effect: it has compelled the government to be more "development minded." At the root of the rebellion lay the general sense of frustration because eight years of independence had failed to bring improvements in economic welfare. Many Indonesians thought that Merdeka (freedom) would automatically usher in prosperity. It did not. And even recognition that action was needed to bring prosperity did not in fact lead to action, because no group emerged with a program commanding enough popular support to be carried through. Indonesian political strength is divided among myriads of parties, splinter-groups and factions. Any two of the four major parties could form a stable coalition government, but no two of them have been able to agree for long and no one of them commands a simple majority. This situation, coupled with the Indonesian tradition that action should represent unanimous opinion rather than the will of the majority, has prevented the adoption of measures to unify the country and raise its standard of living.

Even more paralyzing has been the basic ideological conflict among political leaders. True, successive governments and all parties have declared in favor of "converting the colonial economy into a national economy," but the concept of a national economy differed from party to party and from leader to leader. Only the Communists had a clear idea of what a "national economy" would be. All parties also had the national goal of "organizing the economy along coöperative lines," required by Article 38 of the Provisional Constitution; but this goal, too, lacked clear definition. For some leaders it meant extension to national economic policy of the principles of rice-roots village democracy-- gotong-rojong, kerja sama, ramah-tamah and musjawarat desa (mutual aid, working together, a family-like society, and government by consensus rather than majority). But what this would mean in terms of specific development projects, or monetary, fiscal and foreign exchange policies, or decentralization of powers, was never spelled out. For other leaders, including Mr. Hatta, the "coöperative society" was defined in the European fashion of the 1930s as the "middle way" between Communism and unbridled monopoly-capitalism. For them, to extend the coöperative way to the national economy meant quite simply to organize more and bigger coöperatives.

But while there was no agreement on concrete economic and social policies there was agreement that Indonesia was not to be developed on "capitalist" lines. Such ideologies as rugged individualism, free competition and private enterprise had few enthusiastic backers, indeed were associated in the minds of most Indonesians with imperialism, materialism and a ruthlessly exploitative approach to social organization. Indonesians did not want such "capitalism." What, then, was the economic and social system to be? No one but the Communists was quite sure. Meanwhile, it was considered necessary to avoid making decisions on particular projects and policies--such as laws relating to foreign investment, mining and petroleum--lest the decisions prove inconsistent with the ultimate definition of social and economic aims.

Similarly, while everyone agreed that the political system was to be "democratic" they also agreed that it was not to be democratic in the ordinary "Western" sense. No one but the Communists wanted a "People's Democracy." It was to be an "Indonesian" democracy, rejecting, as Sukarno put it, "the principle that 50 percent plus one is right." But what exactly did this mean? In particular, what did it mean in terms of allocation of powers among central, provincial and local governments? No one was quite sure, and the Constituent Assembly might take years to decide. Meanwhile, it was felt that no new institutions should be set up that might prejudice the final outcome.

With such confusion regarding ultimate goals, national leaders dissipated much time and energy in fruitless ideological debate. Pressing economic issues absorbed the attention of only a handful of leaders in the agencies directly concerned. At some point, proposals for effective solution always ran into an ideological or nationalist issue. Whenever it was a choice between an effective stabilization of development policy and satisfying nationalist sentiments, nationalism won.

The continuing paralysis led to increasing disillusionment with the parliamentary process as a way of getting things done. In the case of Sukarno, this disillusionment found expression in his proposal for "guided democracy"--or "democracy with leadership," to use the translation preferred in Indonesia. It also led to the growth of Communism, a natural response of peasants and workers to disappointment over the failure of Merdeka to bring the expected prosperity. To the simple Indonesian villager the freedom to be won by revolution was not so much political as freedom from hard work, freedom from poverty, freedom from taxes and freedom from the local Chinese money-lender. When independence did not bring these freedoms, Communist and extreme nationalist leaders began talking about "completing the revolution." If we are still poor, they argued, it is because the Dutch and their Chinese lackeys are still running the economy. Only when they are driven out can we enjoy the prosperity we have a right to expect from independence.

This program has a direct and popular appeal. The alternative of patience, hard work and coöperation with the Dutch and other foreigners for a long transition period had no such appeal. The Communists were able to make more political capital of the "complete-the-revolution" slogan than the Nationalists, because they have never been directly represented in the Cabinet and have thus been in a stronger position to criticize the successive governments for corruption and incompetence. Unlike the other Indonesian parties, which are divided between major factions within their membership, the P.K.I. has a single ideology, laid down by a strong, united and capable leadership. Moreover, the experience of Communist movements the world over in organization and infiltration is at their disposal, and they have used it effectively.

To describe the rebellion as an "anti-Communist revolt" is too simple. Certainly the rebel leaders were eager to see Indonesia develop on non-Communist lines; but there was not a single Communist in the legal Indonesian government and Communism could still be fought by constitutional means. The desire for increased regional and local autonomy was one major motive. There was an urge to build upon the "growing points and leading sectors" in the outer islands in order to launch an effective economic development program. There also was the wish to rid the central government of the abuse of party politics and incompetence. But mainly the rebellion, too, reflected disillusionment with the democratic process.

III

The political and military conflicts of the last two years have hidden from view such progress as has actually been made in dealing with Indonesia's development problems. In May 1956 the National Planning Bureau at last presented a five year plan which was approved by the Cabinet shortly afterwards. In referring to this plan in his speech to the first elected parliament in March 1956, President Sukarno stated that Indonesia was passing from a "survival period" to a "period of planning and investment." Apart from technical flaws in the plan, the failure of economic development to take place in a fashion that might have prevented the rebellion was due to continued diversion of government energies to political manœuvring and to the fact that the plan did not give consideration to the plans prepared by regional and local governments. The latter problem was on its way to solution before the rebellion took place. The National Conference on Reconstruction brought together representatives of the dissident regional governments and central government authorities under the joint chairmanship of President Sukarno and ex-Vice President Hatta. It agreed on the necessity of integration of regional development plans into a new national plan. It also agreed on a reallocation of financial resources and investment responsibilities giving greater autonomy to the regions, and these agreements gained Cabinet approval. The Planning Bureau undertook a study of regional development plans with integration in view.

But with continued emphasis on party politics the rate of progress with revision and execution of the plan was too slow to satisfy the dissident groups in the outer islands. It took the rebellion to persuade the government that economic development must be given top priority. After seven years of neglecting economic development for politics, Indonesian leaders were at last forced to realize that economic development is at the heart of the political problem as well.

This brings us to a consideration of how much liberal foreign aid could do not only to improve Indonesia's economic position but to bring political unity and stability as well.

Indonesia has the absorptive capacity to use effectively at least $100,000,000 per year for the next few years; half, under our commodity surplus disposal plan, to provide Java with food and textiles until the problem of providing alternative employment for Javanese peasants can be tackled; and half for highly visible "impact" projects in the outer islands. The latter would include the Asahan Valley development scheme (power, aluminum, pulp and paper, cement, rural electrification, irrigation), the Sumatran highway, the Atjeh railway, improved transport in Celebes and Borneo, land reclamation and mechanized dry-rice farming in Borneo, and the like. While these are being executed more can be planned, and possibilities for developing industries in Java to replace imports can be studied. Such a program would remove one of the major sources of dissatisfaction in the outer islands, reduce the amount of unrest in Java and start Indonesia as a whole on the road to economic development. Two recent developments make Indonesia more receptive to a program of aid than she may have been a year ago. First, the American decision to provide light military equipment has been accepted in Indonesia as a vote of confidence in the government. The failure of the team of East German technicians to put into operation a sugar mill financed by the government has raised doubts about the usefulness of technical and capital assistance from the Soviet bloc.

IV

The political effectiveness of the policy outlined above would be greatly enhanced, however, if we also supported Indonesia on the issue of West Irian (New Guinea). It would help to persuade Indonesians that we are not merely trying to buy their friendship and would deprive the Communists and extreme nationalists of one of their principal rallying cries. Can we pursue this policy with a clear conscience? Let us examine the issue.

The legal basis of Indonesia's claim to West Irian is Article II of the Round Table Agreements of November 1949 between the Netherlands and Indonesia. Article I transferred sovereignty over the rest of the Netherlands East Indies to the new Republic. Article II specifically reserved the question of New Guinea, but stipulated that the "political status" of New Guinea be determined through "further negotiations" within one year. Indonesian governments have interpreted this as a promise that transfer of sovereignty over New Guinea would follow shortly. In addition, Indonesia's claim rests on the widespread antagonism to continuing colonialism anywhere in Asia or Africa.

The Dutch legal position rests on the claim that no transfer of sovereignty over Dutch New Guinea was implied in the Round Table Agreements. It is also argued that the Papuans who inhabit New Guinea are racially and linguistically distinct from the rest of the Indonesians. The Dutch also claim that they can do far more for the Papuans than Indonesia can--an argument in itself irrefutable. Holland has provided about one thousand civil servants and pays out some $20,000,000 net every year to administer the country--more men and money than Indonesia could afford.

To these arguments the Indonesians reply by asking whether Holland will do more for the Papuans than she did for the Indonesians during three centuries of rule, and whether she will bow out more gracefully when the time comes than she did from Indonesia. They point to the Dutch Parliamentary Mission Report which admits that no progress was made in the years between 1953 and 1957. They argue that racially and linguistically the Papuans are certainly closer to the Indonesians than they are to the Dutch, and that Indonesia is already a melting pot for dozens of races and languages. They note that Holland has settled only 15,000 Dutch citizens in the area, half of those Eurasians from Indonesia. Finally, they point out that Dutch New Guinea has been part of Indonesian empires for centuries--not only the Dutch East Indies empire, but the old Indonesian Madjapahit empire of the thirteenth-sixteenth centuries.

It would seem easy to accept the Indonesian claim, as the Soviet Union has done, and support it without reservation. But the hard fact is that the Indonesians are not yet ready to administer and develop a backward area; they are having a hard time administering and developing their present territory. The Papuans have a long way to go in economic and political development, and will need plenty of help. There are about three-quarters of a million of them, living in small nomadic tribes and engaged in hunting, fishing and primitive agriculture. The country they inhabit is bigger in land area than the Philippines; the coast is swamp and the interior is mountainous, with poor thin soil and few resources. One might get the impression that all this wrangling must be for a fabulously rich territory. In bitter fact the conflict is about a land which would be a burden on the budget of anyone responsible for it. Oil? Over $50,000,000 has been spent in fruitless exploration. Dutch activities at present consist mainly of simple agricultural and fishing improvements and Christianizing the people.

The only wholly rational position on the issue has been that of Australia. She would like to see the Dutch remain because she does not want a virtually unprotected area at her back doorstep, where an enemy nation could easily move in and menace her, as Japan did in the last war. Perhaps the Australians are also nervous at the prospect of so unstable a neighbor as Indonesia moving still closer to them.

In other respects the whole controversy over New Guinea adds up to a display of emotional nationalism. The Dutch want to retain it partly as a matter of pride, partly because they want to fulfill their mission to look after the Papuans. With the Indonesians it is pride too, but of a different form. The average Indonesian is probably convinced that a pearl of great worth is being withheld; those who are better informed think the Dutch are trying to trick them again and are determined not to let them get away with it. Indonesians also feel that since they themselves are free of the Dutch they should not allow the Dutch yoke to remain on the shoulders of their brother Papuans.

A trusteeship administered by the United Nations would provide the Papuans with a chance to have their country intelligently developed. It also would meet Australian fears. An aid program could be designed to raise levels of literacy and productivity and provide a cadre of educated people able to administer the country if later in a free vote the Papuans should choose independence from both Indonesia and Holland.

It is difficult to see how Holland would lose from such an arrangement. So far as she may want an outlet for investment and employment for her young men in New Guinea, there should still be such opportunities within the framework of the trusteeship. The big gain for her would be an improvement of the position of the Dutch nationals in Indonesia and the possibility of regaining the $1.5 billion of investments the Dutch still have there. The attitude of the Netherlands Government has greatly damaged the Dutch people and Dutch enterprises still left in Indonesia, as well as those at home who are dependent on trade and raw materials from Indonesia.

But a solution of the West Irian situation is even more important for the Indonesians than for the Dutch. A trusteeship arrangement would avoid the expense of the primary development of the area; and the door would be left open for union with Indonesia later. It would also help the Indonesians to get their own house in order. Once the West Irian issue was removed, it would be less easy for nationalist leaders to divert attention away from the real problems at home.

If the Indonesians refuse to have the issue considered again by the United Nations a face-saving alternative might be to make West Irian an ANZUS responsibility for a few years. Technical and capital assistance for developing the area could still be provided through the United Nations and American aid programs. There is some evidence that such an arrangement might be acceptable to the Indonesians; for them the important thing is recognition of Indonesian sovereignty.

The Indonesian Government has a breathing spell of a few months in which to decide how to meet the problems which were responsible for the rebellion: the need to decentralize governmental powers and to develop the country. One hopeful sign is that virtually all Indonesian leaders now recognize that the mere fact of putting down the rebellion solves no real problems, and that vigorous action is needed immediately if Indonesia is to move with any prospects of success toward prosperity as a united and democratic nation. If they fail again, the chances that Indonesia can be saved from turning to the other path--the path of China--will be slim. In this breathing spell the West should offer Indonesia economic and political support in exchange for adoption of a development plan and a scheme for decentralization of powers that show promise of success. This will make it possible for the Indonesian Government to choose the path to mature democracy.

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  • BENJAMIN HIGGINS, Professor of Economics, Massachusetts Institute of Technology; Monetary and Fiscal Adviser, National Planning Bureau, Indonesia, 1952-53; former Professor of Economics, McGill University; author of "Indonesia's Economic Stabilization and Development" and other works; JEAN HIGGINS, formerly with the Netherlands East Indies Information Service in Australia, now with the Lowell Institute's educational television channel in Boston.
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