Figure 1. Administrative Divisions of Indonesia, 1992

ON MARCH 25, 1992, precisely twenty-eight years from the day on which his predecessor told the United States to "Go to hell with your aid," Indonesia's president Suharto, in a polite but firm note, told the government of the Netherlands to do essentially the same thing. He also forced the quarter-century-old aid consortium known as the Inter-Governmental Group on Indonesia (IGGI--see Glossary), chaired by the Dutch, to disband and regroup as the Consultative Group on Indonesia (CGI--see Glossary) without Dutch participation. Although tensions had been building for several years between Indonesia and its former colonial ruler, mostly over the latter's propensity for taking what Indonesian officials frequently considered a neocolonial and excessively critical approach to the country's development and human rights issues, Jakarta's announcement caught many Indonesia-watchers by surprise. It seemed to them thoroughly uncharacteristic for the Suharto government--widely viewed as the antithesis of the old Sukarno regime and its policies--to take such a stand and stick to it. The Suharto government had been thought to be beholden to, if not dependent upon, Western aid, pragmatically self-interested and self-aggrandizing, and unmoved by emotional nationalism.

For at least three distinct reasons, the disbandment of IGGI serves as an important marker on the road of modern Indonesian history, and may in time be viewed as a genuine watershed. First, the degree to which the announcement of March 25, 1992, startled even serious observers suggests how inadequately--especially considering its size and world importance--outsiders understood Indonesia. The American public, if it recognized Indonesia at all, generally confused that country with Malaysia or "Indochina," and drew mostly a factual blank. In the early 1990s, Indonesia was the world's fourth most populous nation (more than 195,000,000 people), with a territory stretching more than 5,000 kilometers from east to west and comprising more than 7.9 million square kilometers of land and sea and some 13,667 islands. It also possessed the world's largest Muslim population contained the largest tropical rain forest in Asia was a world-class producer of oil (and a member of the Organization of the Petroleum Exporting Countries (OPEC--see Glossary)), natural gas, rubber, tin, coffee, tea, plywood, and other products and, for the period from 1965 to 1989, enjoyed the world's eighth fastest-growing economy. Yet these indications of Indonesia's importance went almost entirely unmentioned in American textbooks and the media.

Jakarta's ambitious Festival of Indonesia, the 1991-92 effort to promote an acquaintance with Indonesia's cultural and economic strengths, appeared not to have been particularly effective in improving public aw 2000 wareness or even in disseminating basic, up-to- date ÍÍÍÍÍÍÍÍinformation. It is not altogether clear why this state of affairs has continued for so long, although presumably the cause is the persistence of a basically colonial paradigm and a more or less undifferentiated popular view of what has come to be called the Third World, as well as, perhaps, the Southeast Asian region.

Academics and other professionals with expertise in Indonesian affairs were a great deal better informed, of course, but their opinions about important issues in Indonesia's past and present were remarkably varied and often severely polarized. Although a great deal of information about Indonesia had been amassed since the end of World War II, there was little agreement as to what it all meant consensus on any substantive question was lacking. Under such conditions, it was understandably difficult to generalize satisfactorily--at either the "general public" or "expert" levels-- about such topics as Indonesian history, politics, economics, society, or culture. In addition, this lack of agreement on Indonesian matters made it nearly impossible to view them, and Indonesia in general, comparatively. As a result, the study of Indonesia became to a very large extent encapsulated and lacking in the perspective necessary for realistic assessments.

Second, the reaction to and analysis of the March 25, 1992, announcement and surrounding events also served to illustrate the severity with which discourse on contemporary Indonesia had become polemicized, often in ideological terms. Nations naturally enough find themselves the subject of occasional controversy, but it may not be an exaggeration to say that in the early 1990s Indonesia stood alone among major nations (save, perhaps, the United States) for the severity and all-inclusiveness of the polemic that had swirled about it for nearly three decades. Nor was the debate merely an academic exercise. By mid-1992 the polemic pervaded Indonesian foreign relations at the highest level, troubling relations with the European Community and the United States, and threatening both Indonesia's chairmanship (1992-95) of the Nonaligned Movement (see Glossary) and its position in the United Nations (UN).

The principal cause of the difficulty lay deeply imbedded in sharply opposed views of the New Order led by the Suharto government, which had ruled Indonesia since the debacle of 1965-66. The Suharto government had come into power following the alleged communist coup attempt of September 30, 1965. In the aftermath of that coup attempt, hundreds of thousands were killed, tens of thousands imprisoned, the Indonesian Communist Party (PKI--for this and other acronyms, see table A) destroyed, and military control extended over the country. For some observers, these cataclysmic events signalled, in addition to mass murder and violation of human rights, nothing less than the end of freedom the collapse of a vigorous, hopeful Indonesian nationalism (personified by the flamboyant and defiant Sukarno) and the death of the promise of genuine social revolution that would lead Indonesians to a better future. In the eyes of Suharto's critics, military rule was not only illegitimate but inept and fascist in character as well, and these critics began a long and painful watch for its demise, either by self-destruction or other means.

Others, however, saw the upheaval of 1965 more as the predictable end to a disastrous era of capricious dictatorship, and, whatever might be thought of the enormous loss of life, they saw society-wide forces rather than simply military hands at work, and celebrated the turn from economic and political folly. These observers believed that the Armed Forces of the Republic of Indonesia (ABRI), although certainly not without its faults, had indeed saved the nation, and they began a patient vigil for signs of success, particularly economic ones.

During the 1970s and 1980s, the debate over the events of 1965- 66 widened and deepened, affecting even casual, tour-book outlooks on Indonesia. It is probably fair to say that, on the whole, the anti-New Order viewpoint gained ground and eventually dominated. Although the foreign diplomatic corps and the international business world did not subscribe, a great many others, especially academics, adopted this perspective, which penetrated discussions of even rather unlikely facets of Indonesian studies such as motion pictures and precolonial literature. Indeed, some larger historical interpretations along this line appeared to become more or less standard fare. For example, Suharto's New Order was characterized as essentially a throwback to the colonial state, and its leader himself became, if not a precolonial Javanese ruler in a charcoal- gray suit, then a co-opted and sycophantic Javanese aristocrat at the beck and call of Western powers. Indonesian society was said to be undergoing a kind of refeudalization and re-Javanization of the kind promoted by the Dutch in the nineteenth century, and the government was said to be reviving Dutch policies toward, among other things, Islam, activist nationalism, and political activism.

Similarly, the National Revolution (1945-49) was increasingly viewed in the light of post-1965 events, becoming for many critics a social failure and even a betrayal of the Indonesian people as a whole. In it they saw the dangerous spores of the New Order: in the Madiun Affair of 1948, a precursor of anticommunist rage in the deflating of populist nationalism and communist activism, a fatal bourgeois mentality and in the role and attitude of ABRI, a glimpse of the future a generation hence. The promise of social liberation, as well as political and economic freedom, was depicted as having been bargained away to foreigners or compromised at home by those determined to save their own class and privileges.

But the principal struggle was over the true character of the New Order and its chances for survival. Curiously enough, neither detractors nor defenders of the Suharto government thought to ask in any great detail why and how the regime had lasted as long as it had, although this might have seemed a logical course of inquiry, but only to argue about whether or not and why its dissolution was imminent. Entire conferences on the future of Indonesia, involving members of the academic, diplomatic, and intelligence communities, were reduced to wrangling over a single question: was the country stable? There was no consensus.

Three issues stood out. The first was whether Indonesia was economically viable and had in fact made progress toward development. The critics thought not, arguing that the nation was totally dependent on foreign aid and that only a small and unproductive elite had enriched itself as a result of modernization policies. The rich were getting richer and the poor poorer genuine change was illusory. Other observers were less sure. They spoke of the government's conservative fiscal management, investment in infrastructure, and concern for the village. Although not every economic problem had been solved, they said, there was improvement for most Indonesians, and the majority of the Indonesian population had in fact credited the government for this improvement.

A second important issue was social viability. From the critic's perspective, the impact of ten or fifteen years of New Order regimen had been to tighten rather than loosen social hierarchies, and to prevent any significant modern social change. What was more, the government--heavily staffed with military personnel--and its policies were distinctly antipopulist, intent on improving the New Order's own position by keeping the village populace sealed off from change and power, and taking advantage of the poor and weak generally. There was still no middle class, just as there had been none in colonial days, and for remarkably similar reasons. Social modernization was ephemeral in Indonesia: remove outside money and one also removed the fiction of changing social ideas and realities. Others, however, argued that changes had inde ed 00 ed taken place throughout Indonesian society that were not tied to the influence of foreign capital. Villagers, despite being conceived as a "floating mass" by an officialdom eager to protect them from politicization, were nevertheless being changed by radio, television, and other media by a variety of forms of education and by the economy. The military itself was being influenced by civilian and bourgeois attitudes, and a complex, varied, and expanding middle class not only existed but also was coming into its own. Signs of a genuinely modernizing social order and consciousness were everywhere.

Finally, there was the issue of political viability. The critics believed the New Order to be politically doomed because of its authoritarian and, some emphasized, fundamentally violent and coercive nature. The military, they argued, did not intend to and would not democratize Indonesia, however gradually any thought that military rule might metamorphose itself into an even moderately acceptable democratic government with adequate respect for human rights and basic freedoms was the merest wishful thinking. On this topic too, however, there was disagreement. Proponents argued that the New Order was not held in place primarily by coercion and suggested that, in fact, a surprisingly broad consensus supported its political form and format. These observers pointed out that ABRI's opinion on democratization was anything but monolithic, and that in any case there was little if any public backing for thoroughly Western-style democracy. In addition, the government was, if nothing else, pragmatic enough to comprehend that economic and social development led inexorably to political development.

By the early 1990s, there had been no closure on any of the major issues. But for the first time genuinely detailed information on independent Indonesia--quantitative data--began to accumulate. It suggested clearly that at least some of the critics' assumptions were mistaken. Against overwhelming expert forecasts, Indonesia had achieved something very close to self-sufficiency in rice. UN and World Bank (see Glossary) statistics showed a shrinking socioeconomic upper class, better nutrition and availability of education, and increasingly improved income distribution. The drop in oil prices during the 1980s, although it slowed the rate of growth, resulted in neither fiscal collapse nor political chaos. Suharto remained in power and in late 1992 appeared certain to serve a sixth five-year term. How and why all this should be so remained inadequately explained and certainly not agreed upon, but the sharpest critics seemed both muffled and puzzled. Some interest emerged in speculating about a noncataclysmic future for Indonesia and in accounting for the successes of the past twenty-five years.

Then, on November 12, 1991, Indonesian soldiers opened fire on a defenseless crowd attending the funeral of a young Timorese killed in a demonstration against Jakarta's rule of East Timor, which had been incorporated as Timor Timur Province after military occupation in 1975. More than 100 civilians may have died. The incident received worldwide coverage and, justifiably described as a "massacre," was effectively used by critics to argue that their views of the New Order had been correct all along. The Suharto government took unprecedented steps to punish those responsible-- steps, which, since they included the discharge, suspension, and court-martialing of both high-ranking officers and soldiers, were unpopular in the military. Few Western governments were satisfied, however. The Dutch, followed by the United States and other nations, began suspending or threatening to suspend aid, and new international pressures against Indonesian rule in East Timor built up rapidly.

A great deal has been and doubtless remains to be written about the Dili killings and their aftermath, including the range of Indonesian responses to the event itself and to foreign reactions (one of which, of course, was Jakarta's decision to break all economic aid ties with the Dutch). Here it is sufficient simply to note that one important effect was to revive and intensify the old polemic over the Suharto government. The debate now seems likely to continue to shape thinking and writing about Indonesia far into the 1990s.

Suharto's rejection of Dutch economic aid on March 25, 1992, had a third significance. It marked unmistakably Indonesia's emergence from the status of basketcase nation, prompting changes in the way outsiders viewed Indonesia and likely to provoke changes in the way Indonesia viewed itself. In a sense, Jakarta's message was a second declaration of independence, and with it, after more than forty years of freedom from colonial rule, Indonesia had "joined the world" as a power intent on--and now for the first time strong enough to demand--being taken seriously. Certainly the Suharto government had, beginning in the early 1980s, earned credibility and even respect from major world powers and international bodies for its prudent fiscal management for its conservative and effective development policies, especially in agriculture and for its stabilizing, constructive role in the international arena, particularly regarding the Cambodia question. And although not without its weaknesses, Indonesia in the early 1990s was demonstrably more powerful economically and militarily than it had been twenty-five years earlier.

Such was the foundation of the new sense of self that appeared in the wake of the East Timor incident of late 1991. Long frustrated by its inability to silence or at least mollify critics of its authoritarian military rule and human rights record, and suddenly faced with what appeared to be the makings of a determined international effort to link reform in these areas to development aid, Jakarta moved swiftly and boldly. A diplomatic offensive in early 1992 prepared the way for the March announcement, which not only attempted to isolate the Dutch from other donor nations, but also dealt the Netherlands an economic blow because the precise form of their aid meant that cessation would bring losses rather than savings to the Dutch. In September Suharto delivered polite but strong speeches to the Nonaligned Movement summit in Jakarta and the UN General Assembly in New York, arguing that North-South relations were in need of egalitarian reform, and suggesting that southern--Third World, developing, and industrializing--nations might well take a more prominent role in resetting the balance, and in helping themselves. Suharto pinpointed North-South relations as the central world problem, now that the Cold War was over, and indicated clearly that the problem could not be solved by the industrial nations and their international institutions attempting to dictate, implicitly or otherwise, social and political values. The style was neither angry nor unrestrained (perhaps in deliberate contrast to the more noisy and extreme statements made by Mahathir bin Mohammad, the prime minister of neighboring Malaysia), but the game was hardball.

In late 1992, it appeared that it would be some time before the outcome of Suharto's challenge became clear. Indonesia's tougher stance brought perhaps unexpectedly chilly responses. For example, Portugal and the Netherlands raised serious obstacles to Indonesia's aid and trade relations with the European Economic Community the United States moved to reduce aid to Indonesia substantially and, possibly in reaction to self-congratulatory advertisements depicting full-page portraits of Suharto, the New York Times snubbed Indonesia's leader and barely mentioned his speech at the UN. But even at close range, it was obvious that Suharto critics and supporters alike would in the future find it necessary to reassess the way they viewed and understood Indonesia, for it was plainly not the same country or society they knew in 1965, 1975, or even 1985. Although the polemic framed in the mid- 1960s continued thirty years later, its object was in many important ways different, and, like it or not, both si des00 des found it increasingly difficult to avoid considering new realities.

Foreign observers were not the only ones pressed in the direction of reassessment, however. Behind the international drama over the events of the early 1990s lay a more complex and subtle question: did Jakarta itself understand the changes that the New Order had--wittingly or otherwise--brought about in the social composition and thinking of the Indonesian people? A varied body of evidence suggested to many intellectuals (civilian as well as military), for example, that an increasingly strong and vocal middle class was coming into existence that public support was growing for a loosening of New Order political constraints and movement toward certain kinds of democratic reforms and that some of the old standby philosophies of state and society that had served Indonesia well in earlier years were now either worn thin or inadequate to the demands of the times. With respect to East Timor, it was apparent that those agitating against Indonesian rule were not the products of pre-1975 society but precisely of the period following, when Indonesia controlled the schools, the media, and the administration. Society had seemingly moved faster than the New Order's capacity to fully comprehend it "joining the world" had brought unimagined, or at least not yet understood, consequences.

Thus, in the early 1990s Indonesia entered a new stage in its national history, characterized, on the one hand, by new powers and international presence and, on the other, by new problems. The New Order's nearly exclusive focus on economic development and its formula of "dynamism with stability" were being challenged by new combinations of forces. These forces were both internal--new social and political concerns--and external--new international pressures, especially in human rights, and new influences of media technology, including, beginning in 1990, cable news service. Difficult as it might be to speak confidently of even the near future, one thing appeared certain: any effort to understand contemporary Indonesia must be as alert to change as to continuity, and must appreciate in all its complexity the rapid transformation that that nation has experienced in the years since Sukarno's political demise. November 1, 1992 William H. Frederick

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After the manuscript for this book was completed in the fall of 1992, a number of important events took place. Two scandals unsettled Jakarta financial circles. In November 1992, Bank Summa, one of Indonesia's largest and most active banks, was suspended from clearing operations. The principal owners, the Soeryadjaya family, sold their equity share in the Astra Group, Indonesia's second largest company, in an unsuccessful attempt to save the bank, which in April 1993 was slated to be liquidated and had begun selling its assets to cover debts estimated at about US$500 million. The Bank Summa failure was only the most spectacular of a number of other similar failures, and Jakarta moved quickly to try to tighten procedures and loan policies. In late March 1993, sales of fake shares scandalized the Jakarta stock market. About US$5 million worth of false stocks appeared to have been involved the perpetrators escaped to Hong Kong. The scandal raised concerns about the stability of the Jakarta Stock Exchange, and efforts were begun to establish a clearing house and a security exchange commission to prevent such occurrences.

Tensions between and among Muslims and Christians rose in late 1992. There was a spate of vandalism of churches and mosques brawls among Muslim students in the capital quarrels over aggressive missionizing by fundamentalist Christian groups and unrest because of army involvement in elections of the leader of the Batak Protestant Congregation in Sumatra. In early December, Suharto felt constrained to remind citizens to show religious tolerance.

The unstable tectonics of Indonesia were proven again in early December 1992 when the island of Flores suffered what was said to be Indonesia's worst earthquake in modern times. The earthquake, which was 6.8 on the Richter scale, reportedly killed up to 2,500 people and destroyed 18,000 homes.

In early December 1992, government forces captured Jose Alexandre (Xanana) Gusmao, the leader of Fretilin, in a hiding place near Dili in Timor Timur Province. Gusmao appeared in a television interview in which he appeared reconciliatory toward the Suharto government, but some pro-Fretilin observers claimed the appearance had been forced. Gusmao went on trial beginning in February 1993, and on May 21 was sentenced to life imprisonment for having, according to the presiding judge, "disturbed the life of East Timorese." Gusmao was cut off after a few moments into reading his twenty-seven-page defense statement it was the first time in memory that a court had refused to listen to a defense statement by the accused. East Timor thus continued in the world spotlight, despite Jakarta's effort to remove it. Foreign pressure on Jakarta grew, and some Indonesia-watchers concluded that independence for East Timor was now a genuine possibility.

In March 1993, Indonesia experienced a shift in Washington's policy toward Jakarta, The United States decided to support critics of Indonesia's rule in East Timor. A result, the United Nation Human Rights Commission, for the first time, adopted a resolution expressing "deep concern" at human rights violations by Indonesia in East Timor. In May the administration of President Bill Clinton placed Indonesia on a human rights (especially labor rights) "watch" list, threatening to revoke the nation's low tariffs under the United States Generalized Scheme Preferences. When Suharto met Clinton and United States secretary of state Warren Christopher in Tokyo in July 1993, concerns were raised about the East Timor human rights issue.

The United States' pressure on Indonesia was only partly occasioned by the hardening of Washington's position on East Timor. In August 1993, the United States was also critical of the Indonesian government's refusal, in late July, to allow the country's largest independent trade union--Indonesian Prosperous Labor Union (SBSI)--to hold its first congress, ostensibly because it was not founded by workers and thus not representative of them. Officials in Washington threatened to revoke Indonesia's trading privileges with the United States if there were no improvement in the situation within six months' time.

Arms proliferation was another issue that was discussed at the July 1993 Suharto-Clinton meeting and was likely to have serious implications for Indonesian-United States relations. The United States expressed concerns about reports that an Indonesian arms sale to Iran might be in the offing. Within the month, the United States blocked the sale of F-5 fighter aircraft from Jordan to Indonesia, giving the human rights and arms proliferation issues as reasons for not approving Jordan's request. Renewal of the stalled United States arms sales to Indonesia continued to be linked to the human rights issue.

American critics of the new hard line expressed concern that the hard-line approach would do more damage than good and in the end would hurt the cause of human rights and democratic advancement in Indonesia. Those who supported the policy of pressuring the Suharto government pointed to the government's July 1993 founding of a Human Rights Commission and its August 1993 announcement that bank loans would henceforth be linked to the environmental impact of the projects involved, as examples of what could be achieved by applying pressure.

On the domestic political front, in March 1993, as expected, Suharto was elected to his sixth term as president. Try Sutrisno, who had retired the previous month as commander in chief of ABRI was chosen vice president a strong nationalist and backer of the military, he was also identified with Muslim interests. Not long after the elections, the new cabinet was announced. Initial Jakarta reaction was that, on the whole, civilians had gained over military, Mu slim slims had gained over Christians, and those with technological expertise had gained over the now aging generation of "technocrats" with economic expertise (although the most important of the "Berkeley Mafia" economic planners, Widjojo Nitisastro and Ali Wardhana, were retained).

In August 1993, government health officials spoke frankly for the first time about a burgeoning acquired immune deficiency syndrome (AIDS) problem. The first official case of human immunodeficiency virus (HIV) infection dates only from 1987, and government figures listed only 144 HIV carriers and 33 full-blown AIDS cases. But in fact, a ministry of health spokesman said, even the estimates of international health organizations, which ranged from 2,500 to 16,000 HIV infections, were too low. A more accurate estimate, he said, would be about 20,000, and Indonesia might well be on the verge of a large-scale AIDS epidemic. (The World Health Organization estimated a year earlier that there may be as many as 500,000 cases.)

As the mid-1990s approached, Indonesia faced political pressure from other nations over human rights, arms sales, labor relations, the environment, and other issues. Domestic politics were only temporarily settled with Suharto's reelection to the presidency in 1993 the succession question was sure to require close watching as his five-year term progressed. At the same time, the country's large labor force, rich mineral resources, and a increasingly diversifying business sector had brought Indonesia to the rank of thirteenth among the world's economies, just behind Canada. Indonesia, which played a prominent role as a peacemaker in the Cambodian situation, which apparently had been resolved in 1993, appeared to have an important part to play in regional and global affairs in the waning years of the twentieth century.

October 1, 1993
William H. Frederick and Robert L. Worden

Data as of November 1992