During the Guided Democracy years, Sukarno played a delicate balancing act, drawing the armed forces and PKI into an uneasy coalition and playing them off against each other while largely excluding Islamic forces (especially modernists as represented by the prohibited Masyumi) from the central political arena. Two other features of his political strategy were an aggressive foreign policy, first against the Dutch over West New Guinea (Irian Barat, or later Irian Jaya Province) and then against the newly created state of Malaysia and demagogic appeals to the masses. A flamboyant speaker, Sukarno spun out slogans and catchwords that became the nebulous basis of a national ideology. One of the most important formulas was Manipol-USDEK, introduced in 1960. Manipol was the Political Manifesto set forth in Sukarno's August 17, 1959, independence day speech, and USDEK was an acronym for a collection of symbols: the 1945 constitution, Indonesian Socialism, Guided Democracy, Guided Economy, and Indonesian Identity. Another important slogan was Nasakom, the synthesis of nationalism, religion, and communism--symbolizing Sukarno's attempt to secure a coalition of the PNI, the Nahdatul Ulama (but not Masyumi), and the PKI. In a manner that often bewildered foreign observers, Sukarno claimed to resolve the contradiction between religion and communism by pointing out that a commitment to "historical materialism" did not necessarily entail belief in atheistic "philosophical materialism."

Indonesia's ailing economy grew worse as Sukarno ignored the recommendations of technocrats and foreign aid donors, eyed overseas expansion, and built expensive public monuments and government buildings at home. In late 1960, an eight-year economic plan was published, but with its eight volumes, seventeen parts, and 1,945 clauses (representing the date independence was proclaimed: August 17, 1945), the plan seems to have been more an exercise in numerology than economic planning. Ordinary people suffered from hyperinflation and food shortages. Motivated by rivalry with the pro-Beijing PKI and popular resentment of ethnic Chinese, the army backed a decree in November 1959 that prohibited Chinese from trading in rural areas. Some 119,000 Chinese were subsequently repatriated, a policy that caused considerable economic disruption. Although Washington and the International Monetary Fund (IMF--see Glossary) sought to encourage rational economic policies, Sukarno resisted. A major reason was that IMF recommendations would have alienated his millions of popular supporters, especially those in the PKI.

PKI power in Java's villages expanded through the early 1960s. In late 1963, following Sukarno's call for implementation of land reform measures that had been made law in 1960, the PKI announced a policy of direct action (aksi sepihak) and began dispossessing landlords and distributing the land to poor Javanese, northern Sumatrans, and Balinese peasants. Reforms were not accomplished without violence. Old rivalries between nominal Mu6ea Muslims, the abangan (see Glossary), many of whom were PKI supporters, and orthodox Muslims, or santri (see Glossary), were exacerbated (see Religion and Worldview , ch. 2). The PKI membership rolls totaled 2 million, making it the world's largest communist party in a noncommunist country. Affiliated union and peasant organizations had together as many as 9 million members. PKI leader Aidit pursued his own foreign policy, aligning Indonesia with Beijing in the post-1960 Sino-Soviet conflict and gaining Chinese support for PKI domestic policies, such as unilateral and reform actions. Some observers concluded that by 1964 it appeared that a total communist takeover was imminent.

Data as of November 1992