THE
INDONESIAN
STORY
The Birth, Growth and
Structure of the
Indonesian Republic
CHARLES WOLF, Jr.
Issued under the auspices of the
American Institute of Pacific Relations
THE JOHN DAY COMPANY, NEW YORK 1948
All rights reserved
Copyright* 1948, by the International Secretariat
Institute of Pacific Relations
1 East 54th Street
Nezv York 22, 2V. Y.
PRINTED IN THE UNITED STATES OF AMERICA
AMERICAN BOOKSTRATFORD PRESS, INC., NEW YORK, N. Y
To
T. W.
PREFACE
It is not surprising that the islands of the
Indies have more than once been referred to as the cultural “melting
pot of Asia.” The founding of the Hindu kingdom of Taruma in
Western Java brought the rich heritage of ancient India to Indonesia
over 1200 years ago. Later, pilgrims from India introduced Gau-
tama’s teachings to the islands, and in the 8th and 9th centuries
Buddhism reached its apogee with the hegemony of the Sumatran
Empire of Shrivijaya. The remarkable Borobodur, with its countless
carved stone figures of the Buddha, still stands in Middle Java as a
monument to Buddhist art.
In the 14th century the Madjapahit Empire, extending from
New Guinea in the East to Sumatra in the West, brought about
a fusion of the Brahman-Buddhist strains in Indonesian culture.
Madjapahit later fell before the crusading vigor of Islam. By the end
of the 15th century Mohammedanism had been accepted in all of
Java and thence it spread to other parts of the archipelago. The
acceptance of Islam was in many cases merely nominal. To this day
Hindu influence remains in Indonesia as a sort of subtle pantheism,
combined with a naturalist paganism in the more remote parts of the
islands. In Bali and several of the remoter parts of Indonesia, Islam
has never been adopted. There the Brahman-Buddhist-naturalist
traditions have endured to the present day, still basically unchanged.
Western penetration into Indonesia began in the 16th century
with the arrival of the Portuguese, who were ousted in 1595 by the
Dutch. Gradually bringing the outer islands under formal control,
the Dutch erected a colonial structure which was to last until World
War II. But as the Dutch colonial structure matured, Indonesian
nationalism evolved. The nationalist movement gathered increasing
momentum after the turn of the century. When the Japanese occu-
pied the islands at the start of 1942, it grew at an accelerated pace
and with Japan’s surrender, the nationalists prepared for what they
hoped would be a new era in Indonesia’s history. On August 17,
vii
PREFACE
1945, the Republic of Indonesia proclaimed its independence. This
is where the present book begins.
For the people of Indonesia, the surrender of the Japanese to the
Allies meant the beginning rather than the end of war; or more pre-
cisely, it meant the beginning of their war and the end of a foreign
war. They had been affected by World War II. It had been waged
partly on their lands and seas. They had suffered during four years
under a Japanese misrule harsher than anything they had expe-
rienced during three hundred and fifty years of Dutch colonialism.
But in Indonesia, and the other areas of Southeast Asia, the people
had never really become a party to or partisans of the war. There
were small pro-Ally resistance groups in Indonesia, and a few ardent
Japanese supporters as well. But in general, World War II remained
for the people of Indonesia a struggle among alien forces.
During the Japanese occupation, the seeds of Indonesian national-
ism burgeoned. To some degree this was the result of Japanese
propaganda. To a larger degree it was independent of Japanese in-
fluence and quite often a reaction against it. Starting from the as-
sumption that the Japanese overlord was only a temporary master,
the intellectual leaders of the nationalist movement in Indonesia
began to prepare for their real problem: resistance to a post-war
restoration of colonialism. Taking advantage of the opportunity,
they began the task of organizing and mobilizing the ignorant masses
of the population in preparation for the future. They collaborated
with the Japanese to secure these ends. They also supported the
Japanese propaganda of “Greater East Asia” and “Asia for the Asi-
atics” largely because it was a useful and practical tool. The Japa-
nese gave the people of Indonesia sufficient grievances against them
to make antipathy against the Japanese keener there, two and a half
years after the occupation, than it is today in the United States. Yet
the nationalist leaders were in many cases willing to collaborate be-
cause of the ends they had in view. Much had been done toward the
achievement of these ends when the Japanese capitulated, and the
struggle for a new Indonesia began.
This was the position in Indonesia when the British prepared to
re-occupy the islands in September 1945. Much of the background
is feeling and impression psychological and emotionalwhich per-
meated almost all of Southeast Asia at the time of re-occupation.
The forces of the past and of the future met and began to be
resolved, as opposing political and sociological forces usually are,
partly by statesmanship and partly by military pressure. This book
PREFACE IX
deals with the meeting and resolution of these forces. More partic-
ularly, it deals with the political and economic struggle which has
been going on in Indonesia since 1945 and with the young Repub-
lic’s record during this turbulent period. Notwithstanding the ex-
tremely fluid situation prevailing at the time of writing, an attempt
has been made to analyze the Republic’s longer-range prospects, and
to suggest their implications.
Many of the issues discussed are highly controversial. Both the
Indonesian and Dutch viewpoints are held strongly, if not violently,
by their adherents. A sincere effort has been made to be objective
in the analysis; that is, to present each side of the controversy in its
own terms and from its own point of view. Where comparison and
evaluation are undertaken, I have tried to be fair. It is, however, not
always easy or valid to subsume the irrational components of revolu-
tion under the rational. Nevertheless, on both sides of the dispute,
material which was felt to contribute heat rather than light has been
left out. Where value judgments have been made/ 1 think they will
stand out clearly as such to the reader. Reactions and comments
elicited by the manuscript prior to printing have indicated that the
above efforts will not prove fully satisfactory to either Dutch or
Indonesian partisans. That is probably unavoidable.
It should be noted that the scope of the present work is necessarily
limited. No attempt has been made to deal with cultural develop-
ments in modern Indonesia. Only brief reference has been made to
the complicated problem of Chinese and Eurasian minority groups.
Nor is the presentation of Republican economics as complete or
analytical as would be warranted in a work of more exhaustive scope.
Finally, limitations of time and space have made it impossible to dis-
cuss fully certain aspects of events in Indonesia which are of partic-
ular interest to the student of international law, e.g. the issues con-
nected with de facto and de jure sovereignty, recognition, etc.
Attention is called to the seeming anomaly that in Chapter VIII
and in earlier chapters, Dr. Hatta is referred to as the Republic’s
vice-president, whereas in Chapter IX an account is given of the
cabinet crisis of January 23, 1948, which led to Hatta’s designation
as Prime Minister and cabinet formateur. The inconsistency was
due to a substantial rewriting of Chapter IX after the earlier chap-
ters were already in print. Since completion of the manuscript, the
Security Council’s Committee of Good Offices has received official
commendation from the Council for its work in bringing about the
Renville truce agreement and the political principles of January 17,
X PREFACE
1 948. With the major part of its work still lying ahead, the Commit-
tee has returned from Lake Success to Indonesia to launch the second
phase of its task: implementation of the truce and assistance to the
parties in framing a final political settlement. After several incidents
in mid-April, which threatened to nullify the Committee’s earlier
work, negotiations between the parties, under the Committee’s aus-
pices, appear ready to begin anew. Decisive results remain to be
achieved.
Much of the material used was derived from personal observation
and experience in Indonesia during the period February 1946 to
June 1947, when the author was a vice-consul in Batavia. For docu-
mentary material which has been made use of, I am indebted to Dr.
N. A. C. Slotemaker de Bruine of the Netherlands Embassy in Wash-
ington, Dr. H. J. Friedericy and Dr. B. Landheer of the Netherlands
Information Bureau in New York, and the Messrs. Charles Thamboe,
Soedjatmoko Mangoendiningrat and Soedarpo Sastrosatomo of the
Republican Ministry of Information. The manuscript was read by
Miss Virginia Thompson, Professor Raymond Kennedy, Mr. Richard
AdlofE, and Mr. Bruno Lasker, whose comments have been of con-
siderable value. I am also grateful for the suggestions and criticisms
which Mn William L. Holland of the Institute of Pacific Relations
has offered at various stages in the preparation of the manuscript.
The Institute, though sponsoring the publication of the book, does
not assume responsibility for the views I have expressed. For all opin-
ions and conclusions presented in the book I am alone responsible.
CHARLES WOLF, JR.
Harvardevens, Mass.
April 19, 1948
CONTENTS
AUTHOR’S PREFACE
PART I
THE BEGINNINGS OF THE REPUBLIC OF INDONESIA
CHAPTER PAGE
I. Birth of the Republic 3
II. The British Occupation 15
III. Proposals, Counterproposals and the Linggadjati Agreement 29
PART II
THE REPUBLIC IN OPERATION
IV. Political Organization of the Republic 49
V. Economic Problems and Policies 68
VI. Republican Leadership 88
PART III
DEVELOPMENTS AFTER LINGGADJATI AND THE OUT-
LOOK FOR THE FUTURE
VII. Failure to Implement the Linggadjati Agreement and the
Final Breakdown 105
VIII. Military Action and the Role of the Security Council 128
IX. Recent Developments and the Outlook for the Future 145
APPENDIX
Preamble and Constitution of the Republic 165
Political Manifesto of the Indonesian Government 172
Text of the Linggadjati (Cheribon) Agreement 175
Letter from Sjahrir to the Commission-General, June 23, 1947 179
Text of the United States Aide Memoire to the Indonesian Repub-
lic, June 27, 1947 180
Memorandum of July 20, 1947, from the Lieutenant Governor
General to the Government of the Republic of Indonesia 181
Interests of American Firms in Indonesia 185
Truce Agreement Signed Jan. 17, 1948 184
Radio Address of Queen Wilhelmina, Feb. 3, 1948 189
INDEX 193
PART I
THE BEGINNINGS
OF THE REPUBLIC OF INDONESIA
CHAPTER ONE
BIRTH OF THE REPUBLIC
On August 17, 1945, the Republic of Indonesia was
proclaimed by a small group of determined men,
“Since independence is the right of every nation, any form of subjuga-
tion in this world is contrary to humanity and justice, and must be abol-
ished. The struggle for Indonesian Independence has reached a stage of
glory in which the Indonesian people are led to the gateway of an inde-
pendent, united, sovereign, just and prosperous Indonesian state.
“With the blessing of God Almighty, and moved by the highest ideals
to lead a free national life, the Indonesian people hereby declare their
independence.”
At its inception the new government claimed jurisdiction over a
land area of more than 700,000 square miles and a population of
more than 70 million. To some its birth came as a complete surprise;
as far as they knew it had no roots in the past that preceded the
Japanese occupation. Actually, this is only partially true, During
the nineteenth century there had been no less than thirty-three
revolts against Dutch authority in the Indies. For the most part,
however, these were Batak or Atchenese or other local revolts; that
is, they came from sectional minorities and did not have a national
character.
The formal nationalist movement in the Indies began in Java in
1908 with the organization of the Boedi Oetomo or “High Endeavor”
society under the leadership of a pacifist social reformer, Soetomo.
From that time until World War II, Indonesian nationalism was
characterized by division and disunity, by factionalism of both ex-
tremist and moderate groups, and by the constant addition of new
elements to the movement. The nationalist movement came to repre-
sent different things to different people. It was linked to social re-
form as advocated by Soetomo. It put its faith in traditionalist or
Taman-Siswo mass education, according to the ideals of Dewantara.
It sought autonomy within the Dutch Empire swayed by the pleas of
3
4 THE INDONESIAN STORY
Soetardjo. It was revolutionary Communism when led by the Mos-
cow-trained Tanmalaka. It was non-cooperative and radical, a call to
resistance to Dutch authority, as advanced by the fiery Soekarno
and the professorial Hatta. It was imbued with the concept of
social democracy and economic betterment under independent In-
donesian auspices, led by the young Western-educated socialists
Sjahrir and Sjarifoeddin. All these elements attached themselves to
the nationalist cause in the course of its evolution. 1 For thirty years,
the diversity of these groups and the conflicts among them, no less
than Dutch suppression of overt acts, stood in the way of Indian
nationalist unity.
At last, in May 1939 a federation of all Indonesian nationalist
parties, the Gaboengan Partai Indonesia or G A.P.I., was formed by an
alliance between the cooperative nationalists in the Parindra party
and the radical nationalists in the Gerindo party, together with a
number of smaller groups and religious organizations. This first coali-
tion was a significant achievement in the development of Indonesian
nationalism, although for some time world events were to prevent
the G. A.P.I, from consolidating and exerting a constructive influence.
Nevertheless, however unstable, the unity which it represented was to
become a symbol of profound importance.
With the start of the war in Europe in September 1939, shortly
after the formation of the G.A.P.L, and the fall of Holland in May
1940, the colonial government of the Netherlands Indies was at that
time obliged sharply to curtail the activity of the nationalist move-^
ment in the interest of the European war effort. Great Britain and the
United States were making urgent demands for strategic stockpiles of
the produce of the Indies for rubber, tin, quinine, fibers, and drugs.
To meet these emergency requirements the Dutch sought to place
the Indies on a semi-war footing.
In accomplishing this economic and strategic aim the Netherlands
Indies Government was eminently successful. As an index of the ef-
fectiveness of this policy, a comparison of exports from the Indies to
the United States in 1938 and 1940 shows an increase for tin of 412
per cent, for rubber of 331 per cent, for drugs and spices of 227 per
cent, for fibers of 218 per cent, and a total increase in Netherlands
Indies exports from about $330,000,000 in value to approximately
$450,000,000. 2
l Cf. Paul Kattenburg, “Political Alignments in Indonesia,” Far Eastern Survey, New
York, September 25, 1946.
* See Rupert Emerson, The Netherlands Indies and the United States, World Peace
Foundation, Boston, 1942, pp. 45-7.
BIRTH OF THE REPUBLIC 5
The heated Japanese negotiations for oil concessions in the Indies,
and the unmistakable signs of trouble appearing on the Pacific hori-
zon, strengthened the Dutch resolve to eliminate dissension and to
render the nationalist agitation ineffectual, at least for the time be-
ing. The Penal Code, forbidding any agitation which might foment
disorder, was narrowly construed and rigidly enforced. Free assembly
was curtailed. The nationalist press was made to toe the line of un-
yielding resistance to the Japanese and of support of the European
war effort. Nationalist pamphleteering was repressed, and many of
the pamphleteers and nationalist leaders were jailed or exiled.
When the Japanese occupied the Indies in March 1942, three of the
future “Big Four” of the Republic Soekarno, Hatta and Sjahrir
were in prison or exile, although their prison sentences had begun
before 1940, and the fourth, Amir Sjarifoeddin, had spent part of
1940 in prison for dangerous incitement, after which he went to
work with the government in the Department of Economic Affairs
because of his antipathy to fascism.
As a result, largely, of Dutch colonial policy from 1939 to 1942,
the Japanese did not have a consolidated Indonesian nationalist
front to contend with when they occupied the Indies. In fact, even
such effective unity as did exist among the nationalists was dis-
rupted still further over the issue of collaboration.
On the one hand, there was a group headed by Sjahrir and Sjari-
foeddin: the young, Western-educated intellectuals who, on purely
ideological grounds, refused to have anything to do with Japanese
fascism. Some of them were immediately jailed. Others, like Sjahrir,
pretended to be only passive toward the Japanese. Released from in-
ternment, Sjahrir went to Tjipanas in the mountains of West Java to
work quietly and plan for the future. Here he and his colleagues
gradually built up the Javanese resistance organization that later be-
came a driving force behind the Republic’s Declaration of Independ-
ence. Here he wrote his Perdjoeangan Kita (Our Struggle) and what
was to become the Political Manifesto of the Republic.
Sjarifoeddin also entered the small underground resistance move-
ment. He was imprisoned by the Kempeitai^ or Japanese Secret
Police, in 1943, and placed under sentence of death, later commuted
to life imprisonment.
On the other hand there was the group, headed by Soekarno,
Hatta, Mansoer and Dewantara, who felt that the defeat of the
Dutch armed forces and the internment of the remaining white
Dutch civilian population promised the dawn of a new era for
6 THE INDONESIAN STORY
Indonesia. This group contended that the new era could best be
prepared for by dealing with the Japanese in the open, rather than
by taking the nationalist movement underground. There is little
evidence to support the charge that this group dealt with the Japa-
nese from choice. In fact, even those whose dislike for the Dutch
originally induced some sympathy for the Japanese soon were alien-
ated completely by the harshness of the Japanese occupation policy,
and by the decidedly unfavorable turn which the war began to take
for Japan.
It is not hard to understand the initial reaction of many of the
nationalist leaders in 1942. In many cases they recognized the Japa-
nese as the victors over a colonial government which, whatever its
merits, had coerced them in peace-time. A certain feeling of grati-
tude and a desire to cooperate with the Japanese were inevitable in
these instances, and yet after the first year of the occupation it be-
came clear to even the most sympathetic nationalists that the na-
tionalist cause would have to be advanced by exerting constant pres-
sure on the Japanese, and not by simply cooperating with them.
There were, furthermore, enough short-wave radio sets operating
clandestinely, despite the untiring efforts of the Kempeitai to ferret
them out, for the nationalists to hear and to become convinced by
1943 that the war was definitely turning against the Japanese in the
Pacific, and that the Japanese hold on the islands was to be short-
lived. Under such conditions, honest and sincere collaboration with
the Japanese was very rare. What at first appeared to be collabora-
tion seems now, upon closer examination, to have been a hard and
tenacious bargaining to secure concessions for the nationalist move-
ment.
THE JAPANESE OCCUPATION
The introduction of Japanese rule after the capitulation of the
Dutch in March 1942 meant the elimination of Dutch officialdom,
and the imposition of military authority over an indigenous adminis-
trative substructure. There was no wholesale overhauling of the
governmental organization despite the elimination of the Dutch, 3
but not the Eurasian, personnel a distinction which was almost im-
possible to draw accurately after many generations of miscegenation.
s In Soerabaja, in 1942, several hundred Dutch officials and petty officials were actu-
ally taken from internment by the Japanese to help solve the city’s food distribution
problem, which the Japanese could not handle themselves after several weeks of try-
ing. Within a relatively brief span of time the Dutch had reorganized food distribu-
tion, and in fact they remained out of internment for over a year until 1943 when the
Japanese felt they themselves were able to control food distribution again.
BIRTH OF THE REPUBLIC 7
With their own military authorities firmly placed at the helm, the
Japanese had as their principal aim that of making the islands self-
sufficient and of gearing agricultural production to the needs of the
war machine.
Where necessary new directing organizations were set up by the
Japanese. For example, an Agricultural Industrial Control Board
(Saibai Kogyo Kanri Kodan) was set up, early in 1942, connected with
the former Department of Economic Affairs, with broad powers to
handle overall financial and procurement requirements for agricul-
tural industries. The S.K.K.K. was also empowered to deal with
storage and distribution of the produce of these industries, and to
gear estate production to the needs of the war effort. In June 1943,
the powers of the S.K.K.K. were extended still further to include
not only large estate industries such as rubber and cinchona, but
also the small estates, particularly those engaged in the production of
fibers and cacao.
In general, however, the exploitative economic war aims of the
Japanese were prosecuted within the framework of an unchanged
administrative set-up. Political measures, including propaganda and
limited concessions to the nationalists, were regarded by the Japa-
nese as means to achieve the main economic goals, and to enlist
popular support for total economic mobilization. Quinine, tin,
petroleum products, fibers, textiles and food products, especially
rice and cassava, were needed; and the Japanese ruthlessly con-
scripted labor into the Hei Ho or Work Corps, to step up produc-
tion. Actually, in the case of all production except quinine which
was increased by 16 per cent, and ramie, a flax plant for making tex-
tiles which was newly cultivated by the Japanese output fell
considerably under Japanese direction. No figures concerning
petroleum or tin production from 1942 to 1945 are available, but
according to both Japanese and Indonesian statistics covering Java,
rice production dropped by 25 per cent during this period, corn by
36 per cent, cassava by almost 50 per cent, rubber by more than 80
per cent in both Java and Sumatra, tea by over 95 per cent, coffee by
about 70 per cent and palm oil by almost 75 per cent.
The labor reservoir also had to be drained to supply men for the
auxiliary army, and for police and air-raid protection. For all these
purposes the method of conscription was employed.
To enlist popular support for such drastic economic measures, the
Japanese launched successive propaganda campaigns which met with
varying degrees of success depending upon the nationalist support
8 THE INDONESIAN STORY
which they received. The first campaign aimed at the glorification
of Japan and the Greater East Asia Co-Prosperity Sphere, with Indo-
nesia as a part. This so-called Tiga A (Triple A) movement extolled
Japan as the “Savior, Leader and Life of Asia” and at the same time
banned all labor and political organizations, and placed a tighter
clamp on the press than the Dutch had ever imposed. Tiga A was
dropped after December 1942, when it had become clear that its
lack of popular support made it a failure.
The Poesat Tenaga Rajat (Central People’s Power) followed in
its wake. The Poetera, as it was called, was a centralized organization
of all political parties (united formally for the first time since the
defunct G.A.P.I.), including also labor organizations and religious
and youth societies. Led by Soekarno, Hatta, Mansoer and Dewan-
tara, the Poetera acquired a strong nationalistic character, and be-
cause of its broader base, became a potentially stronger nationalist
force than the G.A.P.I. had been. The Poetera movement spread
rapidly after its formation in March 1943. While its immediate
effect was to contribute to a more united war effort, it represented a
force and a threat to the Japanese which they were never quite able
to eliminate. In a sense the Poetera was the first formal nationalist!-
cally-mclined organization to manifest itself during the occupation.
As its strength grew and it came to include an Auxiliary Army force
(Tentara Pembela Tanah Aer) and an armed Police Force as well,
the resistance of the nationalists to Japanese demands stiffened.
The Poetera never broke openly with the Japanese, but neither
did it express opposition to the revolts which broke out in Blitar,
Indramajoe and Tasikmalaja as the occupation wore on. The Poe-
tera carried on a continual tug-of-war with the Japanese military
authorities for concessions to the nationalist cause, for higher posi-
tions in the government for Indonesians, and for a withdrawal of
Japanese officialdom. In exchange for these concessions the national-
ists promised support of the war effort.
The relation between the Poetera and the Japanese military was
thus a dynamic one of stress and strain. As the military situation in
the Pacific grew more and more precarious for the Japanese, the
pull exerted by the Poetera intensified. As the Japanese war position
grew still weaker, the Poetera and the nationalists grew stronger, and
the concessions which they were able to elicit widened in scope.
Finally, after considerable earlier pressure from the Poetera, a
Commission for the Preparation of Independence was set up in
April 1944 with Soekarno and Hatta as its guiding lights. By June
BIRTH OF THE REPUBLIC 9
1944 the nationalists were able to exert sufficient economic pressure
on the Japanese to bring about the end of the centralized Agricul-
tural Control Board. In its place, an Agricultural Industrial Trust
(Saibai Kogyo Renokat) was set up, exercising the same functions
and with the same powers as the former S.K.K.K., except that it was
now controlled not by the Japanese military but by private estate
owners and agricultural companies, Indonesian and Chinese as well
as Japanese.
In September 1944, under increasing pressure both from the na-
tionalists and the deteriorating military situation in the Pacific,
Premier Koiso made the first formal Japanese promise of independ-
ence to the Indonesians. The red and white independence flag and
the national anthem, Indonesia Raja (Great Indonesia), which the
Preparatory Commission had adopted, now were recognized by the
Japanese authorities. In addition, new regulations were adopted to
increase the participation of Indonesians in the government as the
nationalists had demanded.
In July 1945, with American forces in the Pacific closing in for the
kill, Count Terauchi, the Japanese Commander-in-Chief for South-
east Asia and the Indies, received instructions from Tokyo to
make preparations for independence discussions with the Indonesian
leaders. The original Tokyo plan provided that independence would
be declared in the name of the Emperor as soon as Russia entered
the war, and it was further hoped by the Japanese that, with this
inducement, the Indonesian Auxiliary Army might then be counted
on to fight side by side with the Japanese against the expected in-
vasion forces.
In early August, Soekamo and Hatta left Batavia for Japanese
Asia Headquarters in Saigon by special Japanese plane at Terauchi’s
invitation. There is every reason to believe that they knew what the
purpose of their visit was to be and what the underlying motives of
the Japanese were.
Less than one week after their return to Batavia the Japanese
capitulation was announced, and somewhat hastily and boldly two
days later, on August 17, Soekarno and Hatta proclaimed the Re-
publicnot in the name of the Japanese Emperor, but in the name
of the Indonesian people.
THE ISSUE OF COLLABORATION
Under the confused conditions which prevailed throughout South-
east Asia at the time of the unexpected Japanese surrender announce-
10 THE INDONESIAN STORY
ment, it was inevitable that suspicion of collaboration should be-
come attached to the new-born independence movements in Burma,
Indo-China, and Indonesia, and that these suspicions would crystal-
lize into definite charges against the new regimes by the returning
colonial powers.
The charges were not long in making an appearance. In Septem-
ber 1945, Dr. Hubertus J. van Mook, the Lt. Governor General of
the Netherlands Indies in exile in Australia, advised Admiral
Mountbatten, the Supreme Allied Commander for Southeast Asia:
“It is obvious that this republican movement is a restricted one and
that its pattern is a dictatorship after the Japanese model. … It is to be
seriously doubted that the puppet government has much of a following,
and it is of particular importance that this extremist organization not be
recognized in any way directly or indirectly [since it is] … simply a
Japanese creation/’
Allied intelligence concerning Indonesia during the occupation
was more meager than for any other area in Southeast Asia. The
charges of collaboration thus found the world at large unable to
judge the situation which had existed during the occupation, or
to recognize the larger scope which the nationalist movement was
to attain immediately after the Japanese capitulation. There had
been no O.S.S. or Allied intelligence teams operating regularly
throughout the archipelago as there had been in other parts of the
region. Indeed, Japanese broadcasts and one or two brief landings
on the Java and Sumatra coasts from submarines by Dutch and
Allied operatives furnished most of the sparse information which
came from Indonesia during the war. The landings of British forces,
in October 1945, in insufficient strength and after a critical six
weeks’ delay, reflected this dearth of intelligence.
Even after the re-occupation it was difficult to obtain the informa-
tion necessary for a candid appraisal of the collaborationist charges.
Released Dutch internees and P.O.W.’s were either too biased or too
out of touch to offer a fair index of the real state of affairs. Un-
biased Indonesians were just as difficult to find, and the Chinese
and Eurasian minorities often were too afraid either of the returning
Dutch or of the Indonesians to speak freely.
One of the few Europeans fully qualified and sufficiently open-
minded to judge these charges and to appraise the Republic at its
inception was a British Army officer, Lt. Colonel Laurence van der
Post Colonel van der Post had been assigned by British Army
BIRTH OF THE REPUBLIC 11
Intelligence to remain behind in Java -when Field Marshal Wavell’s
Southeast Asia Headquarters In Bandoeng decided to evacuate in
February 1942. He had been assigned the mission of continuing
guerrilla operations in the hills as long as possible, and specifically
of keeping au courant of general events during the Japanese occupa-
tion, looking toward the day when Allied troops would return to
the Indies. He himself was interned by the Japanese after the guer-
rilla activities which he had directed in the hills were brought to
an end. Nevertheless, he maintained sufficient contact with the out-
side to remain probably the best authority on the Republic’s pre-
natal history and formation. Unfortunately, however, Colonel van
der Post’s wide fund of information was never given the attention
that it merited.
Actually, an accurate appraisal of the collaborationist charges
which have been directed against the Republic’s leaders depends
primarily on an initial adjustment in viewpoint. In analyzing
collaboration with the Japanese in Indonesia a basically different
approach must be adopted from that applied to the same issue in
the occupied countries of Europe.
In Europe, the populations of the occupied countries knew what
the war was about. Despite blundering and corruption in pre-war
Europe, they knew that fundamentally it represented a struggle for
existence against the expanding forces of aggressive Fascism. They
had the clear evidence before them that the Fascist enemy had
“blitzed” through their defenses, beaten their armies, and forced
their governments into exile. They maintained contact with these
exiled governments through the active underground movements
which flourished under the eyes of the invader. They received news
and pamphlets from their governments by way of the underground
and by air; and they could carry on in the assurance that their
forces and those of their allies were growing stronger day by day and
would eventually return to liberate their soil. In short, despite harsh
and discouraging conditions and deprivations, they still had some
feeling of “belonging,” of being a part of the fight against an enemy
of long standing; a fight that was being prosecuted by their brothers-
in-arms outside the motherland.
Under such conditions collaboration with the enemy by an indi-
vidual citizen was tantamount to treason against his nation’s still-
continuing fight. In Europe a patriotic and thinking citizen’s duty
and attitude toward the invader were clear. Collaboration generally
stood out clearly when judged in this light.
12 THE INDONESIAN STORY
In Indonesia, on the other hand, a patriotic nationalist’s duty and
attitude toward the Japanese were by no means as simple or as clear.
In the first place, the struggle which the war represented between
fascism and democracy was obscure and distant to all but the most
sophisticated and Westernized intellectuals, such as Sjahrir and
Sjarifoeddin. Furthermore, the Japanese were not an established
enemy of long standing with whom the Indonesians had already had
contact before and of whom they had already formed a definite im-
pression. The existence of anti-white racialism, which Japanese
propaganda exploited, led some Indonesians to identify their op-
position to foreign white rule with the Japanese war against the
Western powers.
The Indonesian nationalists did not have the feeling that the
enemy had fought against their defenses, beaten their forces, or
driven their government into exile. In fact, the Indonesian people
had not had any arms with which to fight the invader, since the
Dutch Government had avoided arming or training any large groups,
except for the loyal Ambonese, “and had particularly avoided the
training or arming of educated or nationalistic Indonesians. The
emergency conditions of the period from 1939 through 1942 had not
changed this policy. During this period the Dutch had been even
more circumspect in their building of an Indonesian armed force,
lest it might come under the influence of the nationalist movement.
Finally, the patriotic Indonesian had little feeling of attachment
to or contact with the distant Netherlands Indies Government in
Australia. The underground resistance movement maintained no
liaison with the exiled Dutch. Such resistance as the Indonesians
organized was their own and was neither in close touch with nor
was it supplied by the exile government outside. The Dutch Govern-
ment had gone, and the Dutch civilians remaining behind were
interned and for the most part effectively removed from the scene.
The Indonesians were now alone. They were isolated and left on
their own to sink or struggle to shore as best they could. The resent-
ment and sense of isolation felt were summarized by Sjahrir in his
Political Manifesto:
“When the Netherlands Indies Government . . . surrendered to the
Japanese in Bandoeng in March 1942, our unarmed population fell prey
to the harshness and cruelty of Japanese militarism. For three and a half
years our people were bent under a cruelty which they had never before
experienced throughout the last several decades of Netherlands Colonial
rule. Our people were treated as worthless material to be wasted in the
BIRTH OF THE REPUBLIC 13
piocess of war. From the lowly stations of those who were forced to ac-
cept compulsory labor and slavery and whose crops were stolen, to the
intellectuals who were forced to propagate lies, the grip of Japanese
militarism was universally felt. For this, Dutch colonialism is respon-
sible in that it left our 70,000,000 people to the mercies of Japanese
militarism without any means of protecting themselves since they had
never been entrusted with fire-arms or with the education necessary to
use them. . . .
“A new realization was born in our people, a national feeling that was
sharper than ever before. This feeling . . . was also sharpened by the Japa-
nese propaganda for pan-Asianism. Later attempts by the Japanese to
suppress the nationalist movement were to no avail. During three and a
half years of Japanese occupation, the whole state organization . . . which
had been controlled by the Dutch, was handled by the Indonesians under
the authority of the Japanese. . . . Our nation acquired greater confidence
and our national awareness grew towards the Japanese as well as towards
other nations.
“The millions of people lost during the occupation and the miseries
under which the rest of the population lived . . . must be attributed to
the inadequate preparation which we were given by the Dutch. Because
of these facts the Dutch have not the moral right to accuse us of having
cooperated with the Japanese. . . .” 4
It is certainly true that there were instances of collaboration and
corruption stemming from purely selfish and servile motives. In
general, however, it appears that the overall collaborationist charges
directed against the Republic and many of its leaders must be
judged in the extenuating light of the complex psychological and
emotional factors referred to above. It is in this light that the
occupation records of Soekarno and Hatta and their coterie are actu-
ally regarded by Indonesian public opinion, and it is this factor
which has constituted a major source of strength for both the
Republic and Soekarno. Public opinion in Indonesia regards Soe-
karno and Hatta not as having been pro-Japanese, but as the leaders
who cheated the Japanese by political cunning and who brought the
Republic to life as a result. This is one reason why the colorful per-
sonality of Soekarno, rather than the more profound and more so-
phisticated Sjahrir, has the backing of the Indonesian people today,
It is, of course, impossible not to admire the self-contained in-
tegrity of Sjahrir who staunchly resisted dealing with the Japanese.
Nevertheless, Soekarno and Hatta, largely through their own names
and personalities, preserved the continuity of the nationalist move-
ment throughout the occupation. It is doubtful whether, without
4 Translated from Sjahrir’s Political Manifesto, Batavia, November 1945. See Ap-
pendix, p. 172-
14 THE INDONESIAN STORY
this continuity, the Republic would have had either the organiza-
tion or the popular support which it was to need for survival.
After August 17, 1945, the Sjahrir and Sjarifoeddin group united
firmly with the Soekarno and Hatta group in supporting the Re-
public. Later attempts of the Dutch to drive a wedge between the
two by refusing to deal with the collaborationist Soekarno but
warmly accepting Sjahrir for negotiation failed. Dr. van Mook
finally withdrew his earlier hasty appraisal of the Republic by ad-
mitting at Pangkal Pinang in October 1946:
“Our knowledge of the happenings and conditions in the occupied ter-
ritory of Indonesia was deficient and incomplete during the war This
was particularly true in respect to Java and Sumatra. Misled by outward
appearances … we originally reported the Republic too much as a
Japanese invention, and when in October and November the movement
developed with the speed of tropical growth into a sort of popular revolt
comparable to the September days of 1792 in the French Revolution, it
was difficult to gauge properly the inherent lasting power of this
phenomenon. When we look back into history, it is apparent that in the
Republic forces were at work which signified more and were rooted
deeper than a mere surge of terrorism. …”
Once the Republic had been established, the internal issue of
collaboration was dead. All of the nationalists, whatever the dictates
of conscience had led them to do during the occupation, were solidly
united behind the Republic and its watchword Merdeka! (Freedom).
CHAPTER TWO
THE BRITISH OCCUPATION
One of the most controversial vignettes in the whole
controversial picture of post V-J Day Indonesia has been the activity
and policy of the British re-occupation forces during the fourteen
months of their military controlbetween September 1945 and
November 30, 1946.
Criticism and invective heaped upon the British for their role in
the Indies have been abundant, violent, bitter, and often contra-
dictory. On the one hand, the British were excoriated for being the
protectors and restorers of imperialism, for ruthlessly helping to re-
press the awakening people of Indonesia, for ‘ ’setting the clock
back” in Southeast Asia, and for violating the spirit of both the
Atlantic and the United Nations Charters.
On the other hand, the British were criticized by the Dutch for
impeding rehabilitation in the Indies in order to secure competitive
economic advantages for British Malaya, for bolstering and dealing
with an illegal, Japanese-inspired extremist revolution at its incep-
tion, and for flagrantly violating even the minimum obligations of a
faithful ally.
November 30, 1946, was the day set for the official departure of
the last British occupation forces and for the end of the Allied Forces
Headquarters in the Netherlands East Indies (A.F.N.E.I.). It is inter-
esting to note that after official thanks had been formally accorded
the British forces by the Dutch Governor General, Dr. van Mook,
and the Indonesian Prime Minister, Mr. Sjahrir, on the morning of
November 30, both the Dutch and the Indonesian daily newspapers
in Batavia, the Dagblad and Merdeka> carried long and violently
bitter editorials criticizing the British occupation record. Paradoxi-
cally, they both had a modicum of fact on which to base their
opinions.
During most of the Pacific war, Sumatra and its dependencies
were included in the Southeast Asia Command under Admiral
15
l6 THE INDONESIAN STORY
Mountbatten; the remainder of the Netherlands East Indies had
been placed under General MacArthur’s Pacific theater of operation.
By decision of the combined Anglo-American Chiefs-of-Staff at the
Potsdam Conference in July 1945, military jurisdiction of the whole
Southwest Pacific below the Philippines was transferred to S.E.A.C.
It is true, this transfer took place despite the fact that the United
States had already made preparations for specialized operations in
the Indies at its Malay and Dutch language schools at Stanford and
Yale Universities, and in its Military Government Schools at Vir-
ginia, Harvard, and Columbia. It is also true that this transfer was
made despite strenuous objections by the Dutch. 1
Nevertheless, at the time the transfer was made, the war was ex-
pected to last another year rather than another month, as turned
out to be the case. Despite later allegations to the contrary, it appears
certain that military and not political considerations supplied the
main motivations for the transfer of authority. Military considera-
tions may well have been reinforced by political factors, since, on
the one hand, the British had a particular interest in the archipelago
because of its strategic political and economic proximity to Malaya,
and since, on the other hand, the United States was not anxious to
undertake any re-occupation operations on behalf of colonial powers.
The suddenness of the Japanese capitulation found S.E.A.C. un-
prepared to fulfill its expanded commitments immediately, and what
turned out to be a highly critical delay in the re-occupation ensued.
It was not until September 15 that the first Allied Mission of about
fifty people, as well as Mountbatten’s personal representative, Rear
Admiral Patterson, arrived in Batavia on board H.M.S. Cumber-
land. And it was not until September 29 that the first battalion of
British troops, the Seaforth Highlanders, landed in Batavia more
than six weeks after the Japanese surrender.
During the six weeks hiatus between the Declaration of Independ-
ence by Soekarno and Hatta and the landing of the first small British
forces, the Indonesian nationalists consolidated rapidly and worked
strenuously to set up a functioning “government.” All shades of na-
tionaliststhe former cooperatives and non-cooperatives, moderates
and extremists, collaborationists and non-collaborationistsunited
*At the Pangkal Pinang Conference in early October 1946, Dr. van Mook stated
that- “Notwithstanding great objections on our part, the Allied Supreme Command in
this area was transferred from the Americans, who had for years been preparing them-
selves for their task in this part of the world, to the British whose operational field
up to that time had been much more limited. . . .”
THE BRITISH OCCUPATION *7
in the common effort. Six weeks was not a long time, but the na-
tionalists were bent on making the most of it.
After the Declaration of Independence had been issued by Soe-
karno and Hatta on August 17 in the name of “the whole Indo-
nesian People,” the Preparatory Commission, which had been set up
in April 1944, met from August 18 to August 29 and acted swiftly.
Soekarno and Hatta were elected by the Commission as the first
President and Vice-President of the Republic. The Constitution
which had been drafted during the last month of the war was
adopted. The original document was hastily prepared and not always
thorough or detailed; nevertheless it clearly showed the influence of
the American Constitution that had been used as its model. It pro-
vided inter alia for a President and Vice-President exercising strong
executive control and command of all armed forces, a Congress and
a Council of Representatives to exercise the legislative function, and
a Supreme Court vested with the judicial power.
Under the emergency conditions and pending the election of the
People’s Congress and the Council of Representatives, the Prepara-
tory Commission, guided predominantly by Hatta, decided that the
President and Vice-President would exercise all governing powers
with the advice and consent of a new Central National Indonesian
Committee (Komite National Indonesia Poesat K.N.I.P.). The
Preparatory Commission hastily set up an administrative blueprint
for the republican areas of West, Central and East Java, Sumatra,
Borneo, Celebes, the Moluccas and the Lesser Soendas. This blue-
print roughly restored the former Dutch administrative system with
a governor for each province, with residencies, and with semi-
autonomous sultanates within the provinces. Provision was made for
a cabinet of twelve ministers, 2 all responsible to the President, ac-
cording to the American system. The Preparatory Commission
finally called for the formation of a National Army under the Presi-
dent, from the various armed auxiliaries and “People’s Armies’*
(Laskar Rajaf). On August 29 the Preparatory Commission went
out of existence. The new K.N.LP. was chosen by Soekarno and
Hatta with a broadened base. It consisted of one hundred and
twenty of the outstanding national leaders and included all shades
of nationalist opinion. Republican headquarters were set up in
2 The portfolios in the Cabinet consisted of Home Affairs, Foreign Affairs, Justice,
Finance, Economic Affairs, Health, Education and Culture, Social Affairs, Defense,
Information, Communications, and Public Works.
l8 THE INDONESIAN STORY
Batavia-now called by the Indonesian name “Djakarta.” Shortly
thereafter, Soetan Sjahrir, the leader of the Indonesian intellectuals,
was made chairman of the Working Committee of the K.N.LP.
In quick succession the following steps were taken: Djakarta was
proclaimed the Republican capital; regional governors for the eight
provinces were selected; Soekarno chose his Cabinet; 3 the Sultanates
of Djokjakarta, Soerakarta, Mangkoenegaran, and Pakoealaman an-
nounced their support of the Republic; and the Japanese Hei-Ho
was disbanded.
When the first British troops landed in Batavia on September 29,
1945, the Republic was a going, if still untested, organization. Al-
most all buildings flew the red-and-white Merdeka flag. Government
buildings were conspicuously labeled Kementerian Kasehatan
(Ministry of Health), Kementerian Oeroesan Dalam Negeri (Minis-
try of Home Affairs), Kementerian Loear Negeri (Ministry of For-
eign Affairs), and so on. Posters in English, quoting from the Ameri-
can Declaration of Independence (since American re-occupation
forces had been anticipated by the Indonesians) and from Lincoln’s
Gettysburg address, were in evidence. Indonesian civil police, armed
with Japanese equipment, made their regular rounds through the
streets of Batavia. Despite the run-down appearance of the capital
with its olive-drab coated buildings and pit-holed streets, the city
was orderly and peaceful. The situation was quiet but confusing,
and the natural reaction to this unexpected state of affairs on the
part of the handful of British troops who first arrived was one of
bewilderment.
THE BRITISH DILEMMA
The British forces came to the Indies with two main objectives,
purely military in character. The first was to accept the surrender,
to disarm, and to repatriate the 283,000 Japanese troops concen-
trated in Java and Sumatra, but scattered also over the Celebes, the
Moluccas and Borneo. The second was the liberation and protection
of over 200,000 Dutch and Allied prisoners of war and internees, the
so-called A.P.W.L That these aims could be attained without affect-
ing the political situation, and that British military commitments
could be fulfilled without touching on the thorny problems of
colonialism and imperialism among a sensitive people and in a sensi-
tive world, was a fantasy to start with.
3 Including Sjarifoeddin as Minister of Information, Soebardjo as Minister of Foreign
Affairs, and Dewantara as Minister of Education*
THE BRITISH OCCUPATION 1Q
The presence of a functioning and self-conscious “Republic”
could not be disregarded, and the necessity for some kind of attitude
however vacillating or indefinite or “unpolitical” toward the Re-
public could not but provoke antagonism on one side or the other.
A simple restoration of the legal pre-war Dutch colonialism would
certainly have meant not only serious trouble from the nationalists
but also harsh criticism from a sensitized world press, which Britain,
already under fire in the United Nations and in the press for her
role in the Middle East and in India, could ill afford.
On the other hand, support of the as yet unrecognized Republic
and cooperation with it would certainly alienate the Dutch and
might provoke Holland’s opposition to Britain in the United Na-
tions Security Council, where Britain was in great need of friends. 4
The British met the dilemma by a policy which at least temporarily
had the effect of antagonizing both sides.
With the meager forces 5 of British and British Indian troops
available for the execution of the tasks of re-occupation, it was felt
that extensive operations would not be feasible. The decision was
therefore made to establish secure bases at eight key points in Java
and Sumatra, and later on two or three in the Outer Islands, and to
use these bases as bridgeheads from which to tackle the tasks of dis-
armament and internment of the Japanese and relief of the A.P.W.I.
Realizing the magnitude of his task and the insufficiency of his
forces, the commanding officer of the Allied Forces in the Nether-
lands East Indies (A.F.N.E.I.), Lieutenant General Sir P. A. Christi-
son, issued a proclamation immediately upon his arrival in Batavia
at the beginning of October to the effect that he “intended to re-
quest the present party leaders to support him in the exercise of his
task,” and that since only limited operations could be undertaken by
his forces “the present Indonesian authorities [would remain] re-
sponsible for the government in the areas under their control.”
From the point of view of the Dutch, both pronouncements were
highly and understandably objectionable because of the implied
recognition which they accorded to the “party leaders” and the
“Indonesian authorities,” whom van Mook’s Government did not
wish to have countenanced, officially or unofficially. When Dr. van
der Plas the former Dutch Governor of East Java, and the first of-
ficial representative of the Netherlands Indies Government to return
4 Holland held one of the six elected seats on the Council at the time.
5 It was not until October 31 that the equivalent strength of a full British division
was in Java.
2O THE INDONESIAN STORY
to Javaoffered to conduct preliminary discussions with some of the
Indonesian leaders including Soekarno, he too incurred the severest
criticism from his government in Australia.
The Indonesian authorities regarded this initial British attitude
with cautious and reserved approval. They cooperated to the extent
of continuing to run the civil administration, the telephone, power,
and trolley services and of maintaining civil law and order.
In accordance with the British tactics of setting up key bases for
the further execution of their assigned objectives, Batavia was occu-
pied first, on the 29th of September, 1945, Bandoeng by a small force
on about October 10, Semarang on October 17, Soerabaja on Oc-
tober 25, and Medan, Palembang and Padang in Sumatra somewhat
later. At first little resistance was encountered by the small British
forces, and the Republican authorities remained cautiously coopera-
tive. In Soerabaja, a local branch of the Laskar Rajat or People’s
Army furnished some opposition, but actually this was only slight.
When trouble came afterwards, it was largely the result of a dispute
over the return of Dutch troops to the Islands.
Some Dutch and Ambonese troops that had been interned as
P.O.W/s during the war were soon released and attached to the Dutch
echelon at A.F.N.E.L under the command of the stern old Dutch
General van Oyen, who had arrived from Australia on October 3.
The Indonesian authorities, led by Soekarno and Hatta, were de-
termined, however, that no new Dutch troops should be allowed to
land until recognition of the Republic had been granted. This atti-
tude resulted from a deep-seated distrust and suspicion of the inten-
tions of returning Dutch armed forces, and of the returning Dutch
civil administration whether technically under Allied command or
not. This same distrust and suspicion was, in fact, reciprocated by
the Dutch, and was the cause of much of the unpleasant relations
between the Dutch and the Indonesians during the negotiations of
the next two years. Mutual hatred, despite early reports, was rela-
tively scarce, but suspicion and distrust were widespread.
In the early part of October 1945, two small companies of volun-
teer combat troops from Holland arrived in the Indies, and shortly
after were followed by the disliked Netherlands Indies Civil Ad-
ministration (or N.I.C.A.), which returned to the Indies from
Australia. Their return occurred over the heated protest of the na-
tionalists, who claimed as the minimum price for their continued
cooperation with the Allied re-occupation that no additional Dutch
armed forces or civil administration personnel be allowed to land
THE BRITISH OCCUPATION 21
on Indonesian soil until the Republic’s status had been clarified.
As an ally of the Netherlands, the British could not, even if they
had wanted to, give this guarantee. Only the fact that Holland-
weakened by five years of German occupationwas in no position
economically or militarily to undertake the re-occupation herself as
the de jure pre-war sovereign in the Indies, was responsible for the
assignment of this difficult task to the British and British Indian
troops. When Soekarno and Hatta renewed their protests to the
British and reiterated their demand for this minimum guarantee,
their request was, and under the circumstances had to be, turned
down. Although in fact no large numbers of Dutch combat troops
really landed in the Indies until March 1946, no guarantee could be
given to the Indonesians that their demand would be satisfied. Thus,
the Indonesians’ worst fears and suspicions began to crystallize, and
after public protest to the Dutch and renewed private demands to
the British and to the American Strategic Services Unit in Batavia,
they began to feel that action must be taken.
Soekarno and Hatta adopted a more and more militant attitude
and, in early November, convinced that nothing further could be
accomplished by verbal requests for the guarantee they wished,
moved to Djokjakarta and thereby gave the go-ahead signal for the
unbridled terror which was to ensue in the next two months. At any
rate, not only the Tentara Republik Indonesia (Republican Army),
but the more irresponsible Japanese-trained People’s Armies
(Laskar Rajat), Banteng or Buffalo societies, and Pemoedas (youth
groups) saw in this move the green light to proceed in disorder and
bloodshed.
These groups had to a large extent been trained by the Japanese
and in many cases had “accepted” the surrender of the Japanese
troops in the absence of Allied forces in the interior. There is a typi-
cal, if apocryphal, story of a British major who went to accept the
surrender of a Japanese battalion commander and his battalion near
Soerabaja before a large crowd of Indonesians who ostensibly had
come to watch the ceremony. The battalion was arrayed in full battle
regalia and stood prepared for inspection. The battalion commander
advanced to present his Samurai sword to the British major. As he
did so, his men laid down their arms and advanced to turn them-
selves over to the British major. The crowd thereupon moved for-
ward, picked up the arms from the ground and quietly dispersed.
Whether the story is true or not, it indicates that British weakness
after arrival, as well as delay in arriving, made it possible for various
2S> THE INDONESIAN STORY
groups, irresponsible as well as responsible, to acquire large stocks
of munitions and arms from the Japanese. When the blow-up came,
and the restraining lid of the responsible authorities was removed,
these groups had the weapons to cause the violence which ensued.
Once let loose, it took the “Republic” over a year to get this ill-
assorted group of fighting forces fairly well under control. The go-
ahead signal was much easier for the Republic to give than the stop
signal, but even the majority of the moderate nationalists, who later
mourned the bloodshed of November and December, then felt that
lawless action was preferable to no action at all. Bloodshed cannot
be condoned, it is true, but if there had been no blow-up, Indonesia
might never have attracted the publicity and world interest which
were to play so important a part in restraining future action against
the new republic. The importance of a show of force in the anatomy
of successful revolution cannot be underestimated, even if the force
itself is abusive and ruthless.
The powder keg, which was finally to explode in Soerabaja, began
to smoke in Batavia at the end of October. Streets were unsafe after
dark, and people were kidnapped if they ventured out after curfew
at nine o’clock. The kalis or canals stank with the smell of putrefy-
ing flesh, and part of the newly-released civilian population had to
be returned to wartime internment camps for their own protection.
The same situation prevailed in Soerabaja, but unlike Batavia,
where there were at least troops enough to insure reasonable protec-
tion against a wholesale terror, in Soerabaja the disorder grew worse.
Finally, on November 4, Brigadier Mallaby, the British commander
who had been negotiating with the local Indonesian authorities, was
shot and killed at point-blank range as he drove in his car through
the streets of the town. At the time, not enough troops were avail-
able for the British to take retaliatory action, but on November 9,
Mallaby’s successor, General Mansergh, issued an ultimatum to the
Indonesians to surrender their arms to the British, or offensive ac-
tion would be taken against them to establish law and order.
Such action began the.next day, after it had become obvious that
the ultimatum would not be heeded by the irregular armed bands
that were responsible for the terror. For ten days the Pemberon-
takan, one of the strongest Laskar, held out against the British, led
by their fanatical firebrand Soetomo, and spurred on by the local
broadcasts of an ex-Scottish ex-American woman named variously
Manx, Tantri, and “Soerabaja Sue.” When the smoke cleared, it was
found that several hundred British and Indian troops and several
THE BRITISH OCCUPATION 23
thousand of the irregular Pemberontakan adherents had been killed,
and more than 2,000 civilians had been kidnapped from the streets
or their homes, never to be heard from again.
In Bandoeng a similar sequence of events took place. Houses were
burned and looted, and one section of the town was completely razed.
More than 850 civilians were reported kidnapped and killed in this
city, in addition to the small British losses and the large losses which
the Indonesian bands sustained between November 1 and the end of
December. Batavia actually suffered less because of the larger con-
centration of British troops there, but nevertheless civilian casual-
ties alone here were over 200 during November and December,
1945.*
Under these unexpected and critical conditions, the British were
forced into the unfortunate position of having to use Japanese
troops against the Indonesian extremists in an effort to maintain law
and order. A world-wide storm of protest followed this ironic turn of
events.
The British continued their efforts to bring order to the eight
Allied bridgeheads but decided that action should end at the demar-
cation lines of these bridgeheads because of the additional trouble
which further penetration might cause. British headquarters issued
a restrictive order forbidding any offensive action by Allied troops,
and instructing them to fire only when fired upon. This order
proved to be a constant thorn in the Dutch side, particularly as the
Dutch forces grew stronger and felt themselves able to undertake
action in the interior. As the military forces under the new Dutch
commander, General S. H. Spoor, were reinforced by the arrival
of fresh troops from Europe in March 1946, increasing pressure was
exerted first on the British commander and then on the Nether-
lands Indies Government itself which was negotiating with the In-
donesiansfor permission to take offensive action against the Re-
publican Army (T.R.I.) and the irregular nationalist forces. Later
this pressure was to break through the surface on several occasions,
provoking “incidents” and further complicating the difficult tasks of
the van Mook government.
Gradually, with the beginning of 1946, the situation grew quieter.
On February 10, after a trip to Holland, the Lieutenant Governor
General began new discussions with the Indonesian delegation,
headed by the Republican Prime Minister, Sjahrir, with whom the
Dutch agreed to negotiate though they still maintained that Soe-
Figures from Dutch Army Information Service, Batavia, 1947.
24 THE INDONESIAN STORY
karno and Hatta were unacceptable. The British sent their top
career diplomat, Sir Archibald Clark-Kerr-now Lord Inverchapel-
to Batavia to facilitate the formal negotiations, and with their com-
mencement, the situation took a definite turn for the better.
The military situation was stabilized, and as more and more
Dutch troops arrived from Europe the British made plans for with-
drawal. While General Mansergh, the new British Commander-in-
Chief, retained supreme command, increasing civil authority was
delegated to the Netherlands Indies Civil Administration, now re-
named the Allied Military Administration Civil Affairs Branch, or
A.M.A.C.A.B.
THE BRITISH WITHDRAWAL
According to the Civil Administration Agreement of August 28,
1945, between the British and Dutch Governments, the Supreme
Allied Commander of the re-occupying forces was empowered to
exercise final local authority over all branches of the Netherlands
Indies Government in matters of a military nature. In purely civil
matters the Dutch Lieutenant Governor General remained the top
authority, but his actions were required to conform to military or-
ders. Furthermore, it was up to the British Commander-in-Chief, as
the military situation warranted, “to notify the Governor Gen-
eral of the extent to which responsibility for the civil administration
could be resumed by the Netherlands Indies Government”; and as
the military situation within the Allied bridgeheads and on the
Outer Islands became quieter, the Dutch Civil Administration was
authorized to increase the scope of its operations, though ultimately
remaining subject to the orders of the Commander-in-Chief of
A.F.N.E.L On November 30, 1946, the last British troops left
Batavia, AJF.N.EJ. was officially disbanded, and military as well as
plenary civil control reverted to Dutch hands,
By this date, the tasks for which the British had come to the archi-
pelago were largely completed. Almost all of the more than 280,000
Japanese had been returned to Japan or were on their way home. Of
the 200,000 internees and prisoners-of-war whom the Allied forces
had come to release, less than 2,000 had not yet been evacuated from
the interior of Java, and most of these were post-V-J Day Eurasian
internees whom the Republic had interned for their own protection
against extremist action. Their evacuation was well on the way to
completion by November 30.
One month before the British withdrawal, a truce had been con-
THE BRITISH OCCUPATION 25
eluded between the Dutch and British on the one hand and the
Indonesians on the other. Demarcation lines had been set up around
the bridgeheads, which now became the Dutch strongholds as they
had been the British. Beyond these lines, neither side was to operate
offensively though in practice these restrictions were violated by
both sides. The Indonesians had agreed to the landing of additional
Dutch troops up to the total of Dutch and British troops that had
been in the archipelago when the truce was concluded on October
15. Fresh British-trained Dutch troops arrived and continued to ar-
rive until this 92,000 joint total was reached, to replace the departed
and departing British, and the British turned over their surplus war
stock to the Dutch replacements.
This, in brief, was the military picture which the British left be-
hind on November 30, 1946. They left behind also a fundamentally
altered political situation: specifically, a draft agreement between
the Dutch and the Indonesians which recognized the de facto au-
thority of the Republic over Java, Sumatra and Madura, and which
laid the foundation for a federalized United States of Indonesia.
Finally, the British left behind a residue of bad feeling toward
themselves on the part of the Indonesians and, in an extreme form,
on the part of the Dutch. The Indonesian attitude was not deep but
understandable since, whatever their motives, sympathies and ide-
ology, the British had made possible and had actually brought about
the return of the Dutch,
The Dutch resentment was deeper and, surprisingly enough, con-
siderably more malevolent. Superficially, of course, there was the
ordinary friction which might have been expected from the proud
and independent Dutch finding themselves placed under British
military control, particularly after the long internment so many of
them had undergone. It was natural, also, that the newly-released
Dutch should react when they saw British forces taking the best of
their pre-war houses, furniture, and automobiles for military pur-
poses. There was nothing unusual in all this. The same attitude had
been encountered by United States forces in the liberation of Italy,
France, and the Netherlands.
The source of the Dutch grievance, however, was much deeper
and more unique. Between August 17, 1945, and November 30,
1946, a revolutionary Japanese-inspired rebellion had, from the
Dutch point of view, been given a spurious respectability and in-
direct recognition. This rebellion had become a “government,” the
“Republic of Indonesia,” whose de facto authority had been tenta-
26 THE INDONESIAN STORY
tively recognized by the Netherlands Indies Government at Ling-
gadjati on November 15. From the Dutch point of view, the illegal
uprising was now a quasi-legal government with a history of col-
laboration behind it, and with at least an implied promise for the
future which made impossible a return to the pre-war way of living
for the Dutch; a government which actually ran and continued to run
the civil police, telephone, and power systems in the Dutch bridge-
heads of Java and Sumatra; a government which was conducting one
of the largest “smuggling” trades in history from Sumatra; a govern-
ment which had concluded an agreement as an equal party with the
Government of India to ship rice to India in exchange for textiles
and other “incentive” goods; a government which had possession of
the richest producing areas of the Indies; a government, in short,
which made a return to the pre-war pattern of trade temporarily im-
possible.
After four years spent in harsh internment, many of the Dutch had
longed for a return to pre-war ease and normalcy. As they looked
around them on November 30, even the most bitter among them had
begun to realize that the Republic could now neither be talked nor
wished nor propagandized out of existence. Their natural disap-
pointment and bitterness were vented against the British whom they
held responsible for the fourteen months which had solidified the
Republican position and had sealed the fate of the “good old days.”
Frustration and chagrin over the unexpected turn of events required
a scapegoat, and the British filled the bill.
For, whatever the merits of the Republic and of Merdeka^ it had
been the six weeks of British delay in coming to Java that had
given the Republic time to organize, and it was the weakness of the
British forces that enabled the Japanese to turn over their equip-
ment to nationalist groups, and for Japanese to help put organiza-
tional finishing touches on the new Indonesian army. The British
had, in many cases, dealt with the Indonesian leaders as equals, and
this particularly grated on the colonial Dutch mind. They some-
times addressed Indonesian officials as “your excellency,” as General
Hawthorne allegedly called the Indonesian mayor of Bandoeng at
their first meeting. In Dutch eyes, the British had restrained their
troops and the Dutch troops from taking offensive action against
harassing Indonesian forces. They had sent several unofficial parties
to Soerakarta and to Djokjakarta in the early days for talks with
Soekarno and other Indonesian leaders, and they had placed a plane
at the disposal of the Republic for official flights to and from Djokja
THE BRITISH OCCUPATION 2?
and Batavia. From the Dutch point of view, these actions were viola-
tions of the legal Dutch authority, and the duplicity was attributed
variously to imperialistic British designs on Sumatra, to the British
desire to retard rehabilitation in the Indies until it had been com-
pleted in Malaya in order to secure competitive advantages in world
markets for such products as rubber, tin, spices and gums which the
two areas produced in common, and to British plans for a puppet
Indonesian government under British hegemony.
That there is some basis, coincidental or not, for this antipathy,
is possible. That British instigation could, to any considerable ex-
tent, have been responsible for the nationalistic opposition encoun-
tered by the Dutch, is well-nigh impossible. An active nationalist
movement in the Indies had been much in evidence since its founda-
tion in 1908, and the Dutch had been obliged periodically to repress
nationalist outbreaks by force in the nineteen-twenties and ‘thirties.
The Indies had, in many respects, been an admirably and efficiently-
run colony. Production had been high, and living conditions, for the
population as a whole, had been relatively good compared with those
in other colonial areas in Asia. But there had been no democracy or
official encouragement of nationalist aspirations whatever, under the
Dutch colonial rule; political discontent and resentment among edu-
cated Indonesians had been rife.
Furthermore, there is the fact that, whatever their intentions be-
hind .the scenes, the British trained over 10,000 Dutch officers and
men in 1946, and supplied arms for the outfitting of 62,000 Dutch
troops before leaving the Indies in November. The backbone of
Dutch military strength in the Indies still is, in fact, British-trained
and British-equipped.
Whether the situation would have turned out differently had
American troops come to Java is open to conjecture. That there
would have been certain differences in procedure is obvious. The
Americans would, first of all, have come in sufficient strength and
number to accept the surrender of the Japanese and much of their
equipment, to round up and intern them, and to make the use of
Japanese troops against the Indonesians unnecessary. The Ameri-
cans would possibly have released and evacuated the Allied prisoners
of war and internees more rapidly than did the British. But even
after these measures had been taken, it still is certain that the na-
tionalist problem would have arisen; that the nationalist core would
have been strong and effective; that sufficient military equipment
would still have been available for the Indonesians to maintain an
?8 THE INDONESIAN STORY
army; that the Americans would have been at least as unwilling as
the British to conduct extended military operations against the In-
donesians; that the American troops might have been considerably
more partisan on ideological grounds than were the British, and
that they might have been especially unfriendly to any token mani-
festation of Dutch military might.
At least the conclusion seems warranted that the United States
was temporarily saved from a severe headache, from much criticism
and sharp animosity by the decision of Potsdam to delegate the re-
occupation tasks in the Indies to S.E.A.C. and not to MacArthur.
The British were faced with a particularly difficult and explosive set
of problems in the re-occupation of Indonesia, but even their best
and sincerest attempts to solve these problems received neither the
thanks nor the credit they were due. It is not likely that the United
States would have been more successful under the circumstances.
CHAPTER THREE
PROPOSALS, COUNTERPROPOSALS
AND THE LINGGADJATI AGREEMENT
On March 25, 1947, at the Rijswljk Palace In Batavia in front
of a larger-than-life portrait of Queen Wilhelmina, the Dutch Com-
mission-General and the Indonesian Delegation signed the Ling-
gadjati Agreement after sixteen months of official and unofficial
negotiating sixteen months crammed with statesmanship, persever-
ance, restraint and also pettiness, stubbornness, provocation and bun-
gling on both sides. Sporadically broken off when agreement seemed
impossible or when consultations with the Hague or Djokjakarta be-
came necessary, the negotiations were dominated by the will and
stature of two men, Sjahrir and van Mook. Their convictions in the
face of harsh criticism and their self-control when extremist pres-
sures were exerted upon them from their respective camps were
largely responsible for preventing a complete breakdown as long as
they .did, and for the slow if not always steady improvement in rela-
tions between the Republic and the Dutch Government.
Over all the negotiations hung the specter of mutual distrust and
suspicion. This proved the most powerful obstacle in the way of a
successful meeting of minds, again and again preventing a full
fruition of the work of van Mook and Sjahrir. Van Mook was the
target of attack from both the Indonesian and Dutch press; Sjahrir
had spent eight years in Dutch prisons; yet both kept their heads and
continued resolutely with their painfully slow task. Conflict of many
luminaries and personalities characterized the sixteen months of
heated negotiations: Sir Archibald Clark-Kerr and Lord Killearn, on
the British side; Willem Schermerhorn, and the dignified, conscien-
tious Feike de Boer of the Dutch Commission-General; the strong,
intense Amir Sjarifoeddin and the colorful, photogenic enfant ter-
rible of the Indonesian Delegation, Dr. A. K. Gam, on the Republi-
can side. These forceful personalities, and others as well, contributed
their share to the evolution of events. Nevertheless, Sjahrir and van
29
go THE INDONESIAN STORY
Mook dominated the discussions; their hardheaded realism and fore-
sight were largely responsible for such progress as was made, until
the signing of Linggadjati.
Van Mook, criticized bitterly by right-wing groups in the Nether-
landsincluding the former Prime Minister Pieter Gerbrandy for
being a traitor and a weakling, exercised the careful, plodding, de-
pendable statesmanship without which a permanent alienation of
the Republic would have materialized immediately. A keen if not
brilliant negotiator, van Mook headed the body by Dutch liberal
opinion which favored protection of Dutch economic interests at the
price of political compromise. The Linggadjati Agreement was an
epitome of this viewpoint. When, under the influence of pressures
which will be examined later, Dr. van Mook’s views underwent a
substantial alteration, the hostilities of July 21, 1947, resulted.
On the other side, Sjahrir was responsible for holding back ex-
tremists who sought to turn Soekarno’s policy away from compromise
with the Dutch. Sjahrir is probably one of the most reasonable, un-
assuming and moderate revolutionaries who ever lived; he demon-
strated that unusual combination of tenacity of purpose and willing-
ness to compromise which characterizes true statesmanship, and
which was so instrumental in the framing of the final agreement;
a combination which is all the more remarkable in a man so young
(thirty-eight years), the major part of whose political career, from
1934 to 1942, had been spent in exile in Tjipinang, Java, Boven
Digoel, New Guinea, and Banda Neira.
OFFICIAL DUTCH POLICY
In November 1945, the cornerstone of the returning Dutch Gov-
ernment’s policy was a speech made by Queen Wilhelmina on De-
cember 6, 1942, outlining the future concessions which the Crown
was prepared to make in its colonial policy. As with most broad
policy statements, the Queen’s speech was properly generalized and
open to diverse interpretation. It was the task of the returning Dutch
Government to adapt this policy to prevailing circumstances in such
a way as to secure the greatest possible protection of Dutch interests
in the Indies. Since the colonial government had not had sufficient
information concerning these circumstances, and particularly con-
cerning the character and strength of the new Republic of Indonesia,
it had to work out this adaptation gradually. Temporarily, therefore,
pending test and scrutiny of the new forces, the Dutch stuck closely
to the letter of the Queen’s speech and refused to make any specific
THE LINGGADJATI AGREEMENT 31
or new commitments. Much ill-feeling and animosity could have
been avoided if the van Mook government had from the start pos-
sessed the knowledge, capacity and resiliency to supplement the
letter of the Queen’s speech with a more friendly attitude toward
the budding, if not perfected, Republic.
The official Dutch policy had no place for, and took no account of,
the revolutionary Republic. This, indeed, was at first simply dis-
missed and discredited as a temporary and weak Japanese-inspired
movement which would collapse as soon as its collaborationist
leaders were arrested. When Dr. van der Plas, the first representative
of the Netherlands Indies Government to return to Indonesia, went
as far as to suggest that Soekarno be invited to submit his sugges-
tions for the reconstruction of the Indies, he was reprimanded by his
own government. Even van Mook’s meeting with Soekarno in
Batavia in early November was described by the Hague as taking
place “against the expressed wish of the Netherlands Government
and against its instructions.” Dutch policy as laid down by the
Queen did not appear to have any room for a revolutionary regime
in Indonesia, whose sponsorship and strength did not derive from
Dutch-approved sources.
In brief, the policy outlined by the Queen reaffirmed the Nether-
lands Government-in-exile statement of January 27, 1942, which
called for a Round Table Conference of the Kingdom consisting of
representatives of the Indies, Surinam, and Curasao, as well as the
Netherlands, “to discuss collectively a project for the reconstruction
of the Kingdom and its constituents along lines suitable to the
changed circumstances.” The Queen in December of the same year
supplemented this by stating that the Kingdom should be recon-
structed on the basis of a complete and equal partnership among the
constituents, and that the Round Table Conference “will direct its
efforts towards the creation of a State Union (Rijksverband) in
which the Netherlands, the Indies, Surinam and Curasao will be
equal partners” while retaining the right of self-government on
purely domestic matters.
On November 6, 1945, the Netherlands Indies Government re-
iterated this policy by direct quotation from the Queen’s speech. In
addition, the Government recognized the legal, nationalistic aspira-
tions of the Indonesians (not of the Republic, however), but indi-
cated clearly that the Netherlands Government considered itself re-
sponsible for directing the development of Indonesia up to the time
when it would be able to stand as an equal partner with the other
g2 THE INDONESIAN STORY
three components of the reconstructed Kingdom. Also, the Dutch
statement promised a democratic representative body to consist
predominantly of Indonesians, an expansion of educational facil-
ities, a recognition of the Indonesian language as the official lan-
guage along with Dutch, and abolition of social and racial discrimi-
nation. This program promised broad revisions in colonial policy,
which, by 1939 standards, were themselves revolutionary in charac-
ter.
Before the war, and after the revision of the Netherlands Consti-
tution of 1922, the Kingdom had been described as being composed
of four constituent parts the Netherlands, the Netherlands Indies,
Surinam and Curasao, It was not, however, at that time stated or pre-
sumed that these parts were on an equal footing. The Crown re-
tained the right to suspend all ordinances enacted by the Nether-
lands Indies Government. Secondary and final control of the Indies
budget, as well as the right to legislate on subjects affecting thfc in-
ternal affairs of the Indies, were retained by the States-General in
the Netherlands. Until the Japanese oil negotiations in 1940-41,
which van Mook handled from Batavia in his capacity as Lt. Gover-
nor General, all foreign relations of the Indies were managed from
the Hague. The Volksraad or Parliament of the Indies was, more-
over, a quasi-legislative body, partly elective and partly appointive
in composition, which could only initiate certain kinds of legislation
and which was, in any case, subject to the Governor General’s veto.
Political liberties had been strictly defined by a rigid code, and sec-
ondary and higher education had been limited.
There had, then, been no political democracy in the Indies before
the war. High-placed liberals in the Netherlands Foreign Office have
readily admitted this fact. The Government’s new policy of Novem-
ber 6, 1945, thus was a marked and progressive divergence from pre-
war policy, even though it carried no mention or acknowledgment
of the Indonesian Republic.
The zealous, self-conscious republican leaders had certain con-
ceptions which were basically at variance with the Dutch policy
statement of November 6. Primarily, they favored the development
of Indonesia under the Republic rather than under the aegis and re-
sponsibility of the Dutch, as projected by the November 6 statement.
In addition to this difference, and to the further estrangement oc-
casioned by four years of Japanese occupation and the stimulating,
sometimes belligerent new feeling of dignity with which the na-
tionalists felt themselves endowed, there was the belief, strong and
THE LINGGADJATI AGREEMENT 33
widespread among them, that the Dutch could not be trusted to carry
out their promises. Right or wrong, justified or unjustified, this dis-
trust persisted. It made the Indonesians unwilling to take any of the
Dutch suggestions at face value in November 1945, and for that mat-
ter in November 1946, when the Linggadjati Agreement was drawn
up. This distrust was reciprocated by the Netherlands Government
which feared the Republic was out to sabotage all Dutch interests,
legitimate as well as illegitimate. Moreover, the distrustful die-hard
elements on both sides were to find abundant justification for their
fears in the course of the trying events of the following months of
negotiation.
The Indonesian position was that the Republic claimed to be and
was the de facto authority over all the territory of the Indies, and
that the Republic was prepared to negotiate with the Dutch as a
specially interested power, although recognition of the Republic’s
independence was the sine qua non of any such negotiations. Both
the Dutch and the Indonesian basic claims were to be modified sub-
stantially before the Linggadjati Agreement was concluded.
On November 14, the Republic took a first step toward com-
promise by altering its governmental form. The Soekarno Cabinet,
which had been chosen by and responsible to the President accord-
ing to the American system, was replaced by a Cabinet headed by
Soetan Sjahrir, and responsible to the Central National Indonesian
Committee (K.N.LP.). Sjahrir was an ardent nationalist with no
taint of Japanese collaboration, and it was expected that the Dutch
would deal with him where they had been unwilling to deal with the
allegedly collaborationist Soekarno. The change, which was the most
basic and lasting one to take place in the formal composition of the
Republic until Sjahrir’s resignation on June 27, 1947, was a signifi-
cant concession under the circumstances. In the long run, further-
more, it strengthened the Republic’s position as well, since Sjahrir
was probably a shrewder negotiator than Soekarno would have been.
THE BEGINNING OF NEGOTIATIONS
On November 17, the first informal discussions between Sjahrir
and van Mook took place under General Christison’s direction. The
initial optimism which the beginning of the discussions occasioned
was short-lived, however. After only the most cursory notice of the
Dutch policy statement of November 6, and without any formal dis-
cussion of the proposals which it contained, the meetings were
ended. They broke down over the question of the return of the
34. THE INDONESIAN STORY
Dutch troops to the islands. Sjahrir and Sjarifoeddin could not agree
to this under any conditions, until the Republic’s status had been rec-
ognized. The K.N.I.P. supported Sjahrir’s stand by an overwhelm-
ing vote of confidence, and in the tense atmosphere engendered
by the outspoken and frank disagreement and distrust between
the negotiators, the extremist terror of November and December
broke out in Batavia, Bandoeng, and Soerabaja. While the terror
was set loose by the breakdown in discussions, it soon took its own
head, and could not be controlled by the Republic. It is interesting
to note that although the Republic did not itself control the terror,
no cleavage developed between the Pemoeda or youth extremists
who actually created the disorder and the Republican Government.
The Pemoeda groups, in fact, voted to support the Republic even
while carrying on, separately and locally, their armed activities.
With the discussions halted after November 22, the terror grew
worse, and at the Singapore Conference on December 6, General
Christison received a mandate to re-establish law and order in as
large an area as possible. The Dutch, however, were informed at the
time that widespread offensive action against the Indonesians was
not part of the British re-occupation task or policy.
On December 15, in the midst of the political deadlock and wide-
spread civil disorder, van Mook left for Holland. Of the several low
points in the course of developments, this was perhaps the lowest.
Throughout the Indies terror was rampant. The Dutch seemed to
have neither the imagination to sponsor cooperation with the Re-
publican movement, nor the force to suppress it. The political aims
of the Indonesians and the Dutch were at variance over the question
of the status of the Republic itself, and neither side was willing to
make concessions lest they be interpreted as a sign of weakness. The
British military role, moreover, was inadequate due to indecision
and insufficient strength, and anti-British feeling on both sides was
mounting. World opinion was shocked by the travesty on “libera-
tion” represented by the unexpected course of events in Indonesia.
The United Nations Security Council was casting an interested eye
on Indonesia as a subject to be added to its already crowded agenda.
The first exchange of views between Dutch and Indonesians cer-
tainly showed little of that statesmanship or constructive com-
promise which were to become so necessary at Linggadjati. At the
end of November, the liberal elements on both sides were submerged
under a flood of bitterness and distrust, and the future seemed dark
indeed. The Linggadjati Agreement was all the more remarkable
THE LINGGADJATI AGREEMENT 35
when considered against the hopeless background of November and
December 1945.
By the time van Mock returned to Batavia one month after his de-
parture, the atmosphere had improved considerably, partly because
of the discussions between the British and Dutch Governments at
Chequers, and partly because of the incipient recognition by the
Schermerhorn Labor Government at these discussions that the Re-
public could not be ignored or discredited but must be faced and
dealt with. From the Dutch point of view, the discussions in London
at the year’s end had resulted in a British agreement to devote in-
creasing effort to assuring the safety of the A.P.W.I. in the Indies
and to the maintenance of order. General Christison was to be re-
called and replaced by the “unpolitical” Lt. General Sir Montague
Stopford, whom the Dutch found more acceptable. From the In-
donesian point of view, the London decision to withdraw the old-
guard Dutch militarists, Admiral Helfrich and General van Oyen,
was a step in the right direction. Furthermore, the moderate com-
muniqus of the liberal Schermerhorn Government, with which the
Indonesians had had no previous contact, also were regarded favor-
ably by the Republic. Finally, the announcement that the British
would send to Indonesia Sir Archibald Clark-Kerr now Lord Inver-
chapel their senior career diplomat and ambassador-designate to the
United States, to facilitate a resumption of discussions, was wel-
comed on both sides.
While the Security Council commenced discussions on the In-
donesian question, van Mook and Sjahrir met for the first time in
over two months on February 10, 1946, under Clark-Kerr’s guiding
hand, and the first constructive proposals of the Dutch Government
to the Republic were presented. In the Government’s new statement
of policy that day, and in the explanatory memoire which followed
six days later, it was stated that the Government would seek the ap-
proval of all important regions and population groups in the Nether-
lands Indies for the re-organization of the Indies as aii autonomous
commonwealth under the Crown. It was, moreover, promised in the
memoire of February 16 that after a period of preparation and con-
solidation within the Kingdom, the duration of which would be de-
termined by discussion and agreement, Indonesia would be given
the right freely to choose its own political future, and the Nether-
lands would endeavor to sponsor its admission to the United Na-
tions.
With this resumption of negotiations and presentation of formal
gg THE INDONESIAN STORY
Dutch proposals to Sjahrir, a seed of promise, albeit a frail one,
was planted. The Security Council reacted promptly by dropping
the subject from its agenda, after Russia and Poland had unsuccess-
fully supported a Ukrainian resolution to send a United Nations in-
vestigating committee to Indonesia. The position of the United States
on the Council was in opposition to the resolution on the explicit
ground that there were now signs of progress between the parties
concerned which made United Nations investigation no longer nec-
essary, and on the tacit ground that the suggested cure, with pre-
sumably some Russian ingredient, might be worse than the ailment
itself.
Actually the proposals of February 10 were still a long way from
acceptability, and their reception in Indonesian circles was cool.
The proposals nowhere either mentioned the Republic nor ac-
corded it any direct or indirect recognition whatever* No guarantees
were given to the functioning Republican Government or its calum-
niated leaders, and the promise of an interim period was considered
too vague to be meaningful. The more extreme nationalist Laskar
and Pemoeda groups, as well as the Masjoemi and P.N.I. or Na-
tionalist Parties, openly rejected the proposals and reiterated their
demands for complete and immediate independence of all of Indo-
nesia, while the armed extremist bands continued their harassing ac-
tions against the British forces in the Outer Islands and in the bridge-
head areas of Java and Sumatra. The discussions seemed likely to
break off again, but the redoubtable Sjahrir clung to the hope that
frank discussion could accomplish more than terror. Almost alone
among the nationalists in this hope, he went to Djokjakarta with the
new Dutch proposals and persuaded the Central National Indo-
nesian Committee (K.N.I.P.) and President Soekarno that, unac-
ceptable as the proposals were to the Republic, in their present form,
they should be considered as the starting point for further discus-
sions aiming at securing more acceptable terms. Returning from
Djokjakarta on March 4, stronger than ever and with a plenary man-
date from the K.N.LP. to negotiate, Sjahrir began the long uphill
struggle to identify the Republic with the forces of compromise and
discussion, rather than with those of disorder and terror.
Sjahrir countered the somewhat abstract proposals of February 10
with a comprehensive statement of the Republic’s attitude. He pro-
posed that recognition of the Republic of Indonesia, as a sovereign
state exercising authority throughout the archipelago, be regarded
as a starting point, and that thereafter close cooperation with and
THE LINGGADJATI AGREEMENT 37
assistance from the Netherlands Government on all matters would
be welcomed. From this point on, van Mook took the initiative and
suggested exploratory discussions along the lines indicated by the
French blueprint for Indo-China. According to the French plans,
the Vietnamese Republic in Indo-China was to be an etat libre or
free state within the Federation Indo-Chinoise, which in turn was
to be a part of the Union Frangaise. Making it clear to Sjahrir that
he was not empowered to make any commitment beyond the pro-
posals of February 10, Dr. van Mook nevertheless agreed to investi-
gate Sjahrir’s new suggestions along the lines of the Indo-China
blueprint. While still an unofficial action, this fundamental change
in attitude was a tribute to van Mook’s imagination and adaptabil-
ity, and was a suitable and complementary reply to the restraint ex-
ercised by Sjahrir after his return from Djokjakarta on March 4.
Like Sjahrir’s expression of willingness to continue negotiations at
that time, van Mook’s forward step was made against a storm of
criticism from the die-hards.
The explorative discussions which ensued between van Mook and
Sjahrir, (with Clark-Kerr, in his own words, confining himself to
“pouring the drinks”), made considerable progress up to the point
at which the Republic agreed that, once it had been recognized, it
might take its place within a federated Indonesia connected with
the Kingdom. At this point, van Mook felt that sufficient progress
had been made along the new line of approach to warrant his return
to Holland in order to determine whether the new course would be
acceptable at the Hague, and whether his own mandate to negotiate
would be extended by the Netherlands Government beyond the
limitations of the February 10 statement.
Consequently, van Mook returned to Holland in early April, and
Clark-Kerr, who had been sent to Indonesia to get the discussions
started again, returned to England en route to his new post in Wash-
ington. Upon his return, van Mook’s views found strong support
from the Labor Government and particularly from the Minister of
Overseas Territories, J. H. A. Logemann, and strong opposition
from the van Poll Commission 1 which had returned from a trip to
Indonesia to inform the Lower House of developments there. Loge-
mann himself undertook the difficult task of making the unpalatable
concessions contemplated by van Mook acceptable to a Lower House
1 The van Poll Commission was appointed as a fact-finding group to report directly
to Parliament on the situation in Indonesia. Named for its chairman, Max van Poll
of the Catholic Party, the Commission completed its three-month mission and re-
turned to the Netherlands at the end of April 1946.
38 THE INDONESIAN STORY
which was beginning to become more conservative as reconstruction
in Holland progressed. Finally, with grave misgivings from the Anti-
Revolutionary and Catholic Parties as well as from the van Poll
Parliamentary Commission, the Lower House agreed to support the
new policies outlined by Logemann in his speech of May 2.
In the first of two speeches in which Logemann eloquently de-
fended van Mook’s policy, deplored the van Poll Commission’s
superficial report which had stressed the Japanese-inspired origin
of the Republic and concluded with a remarkable statement em-
phasizing the vitality of nationalism in Indonesia and the need for
cooperation with, rather than opposition to, the Republic, he
argued:
“The reality of nationalism is a primary fact for which we stand and
will continue to stand. … In Indonesia this [nationalistic] movement is
above all other considerations. One can indeed make a distinction and
state that the broad masses of the population have hardly arrived at
political awareness and that among these broad masses nationalism is
still only a spiritual awareness which is not of much practical con-
sequence. If, however, one acknowledges the presence of any awareness,
one must ultimately acknowledge the vitality of nationalism. I am con-
vinced that there is not one man of influence in Java who is not a part
of the nationalist movement in one way or another, although some value
law and order so highly that they stand with the Government [rather
than with the Republic]. . . . There is only one realistic approach from
our side, alongside of which all else is pure fantasy; and that is that if we
wish to solve this problem in a way which will stand the criticism of
world history, then we must, with all the earnestness and sincerity that is
in us … aim at cooperation with the [nationalistic] group [of Sjahrir]
and therewith to reach agreement. There is no other way.”
The Parliamentary debates in Holland closed on this hopeful
note. Van Mook returned to Batavia. The new proposals, which he
presented to Sjahrir on May 19, 1946, for the first time specifically
countenanced the Republic and offered de facto recognition of the
Republic’s authority in Java, with the understanding that the Re-
public would become part of a federated Indonesian State within
the Kingdom, such a state to have the right of eventual independ-
ence after a suitable interim period should it so choose.
These new proposals had come a long way from the February 1
policy and seemed a step toward real agreement. But they were still
unacceptable to the Republic. The picture of hope and optimism
that prevailed on May 19 was to change sharply by a series of un-
fortunate incidents which almost caused a complete rupture of the
THE LINGGADJATI AGREEMENT 39
improved relations which van Hook and Sjahrir had worked to
build up.
After Sjahrir received van Mook’s second set of proposals on May
19, he returned to Djokja for a Cabinet session to discuss the new
Dutch offer. At the same time, general elections were called in Hol-
land. The Schermerhorn Cabinet resigned on May 21, although
continuing to function until a new Cabinet should be formed.
Sjahrir returned from Djokja with counterproposals to the Dutch
offer on June 17, but van Mook was not yet ready to conduct further
formal discussions until he received a new mandate or until the new
political line-up and policy in Holland had been clarified. The
counterproposals rejected the proposals of May 19 and suggested in-
stead recognition of the Republic’s de facto authority in both Java
and Sumatra and the formation of an alliance with, rather than a
partnership under, the Crown.
Further events forced the Sjahrir-van Mook negotiations out of
the limelight. In the latter part of June 1946, a coup d’etat was at-
tempted against the Soekarno-Sjahrir Government. Led by the Com-
munist Tanmalakka and the disaffected, ambitious Soebardjo, who
had been dropped from the Foreign Affairs portfolio when Sjahrir
organized his first Cabinet, this “popular front” movement was
sharply leftist in character, and opposed the dealings with the Dutch,
aiming at the overthrow of Sjahrir and Soekarno. Sjahrir was kid-
napped by this misguided group in Soerakarta toward the end of
June, and for a while it was rumored in Batavia that he had been,
or would be, killed by his kidnappers. What such a catastrophe
would have meant, it is hard to say, but it might well have ruptured
relations between the ‘Dutch and Indonesians permanently. For at
that time, Sjahrir was probably the only Indonesian acceptable for
negotiations by both sides. Had he been killed, it is likely that right-
wing Dutch pressure would have diverted the policy of the Nether-
lands Government toward stricter and harsher measures.
Acting quickly and decisively, Soekarno proclaimed a personal
dictatorship over Republican areas on June 30. Amir Sjarifoeddin,
the Minister of Defense, ordered the arrest of the ten leaders of the
attempted coup and secured the release of Sjahrir. Soekarno’s and
Sjarifoeddin’s drastic but effective action preserved the continuity of
the Republic and nipped in the bud what might have grown into a
political break-up in the interior.
A new Cabinet was formed in the Netherlands on July 2, consisting
of a Catholic-Labor coalition, with the Catholic Party controlling
40 THE INDONESIAN STORY
about 30 per cent of the seats in the Lower House and Labor a close
second with approximately 24 per cent. The farsighted Minister
Logemann was replaced by the Catholic Party’s representative, Jonk-
man, but no immediate change in policy toward Indonesia material-
ized because the support of the liberal-leftist Labor Party was
necessary for the new Cabinet to govern. The later stiffening of
Dutch policy, however, was not unrelated to the earlier change in
the makeup of the Netherlands government.
After formation of the new government in the Netherlands,
Sjahrir’s counterproposals of June 17 were held in the Dutch
Cabinet for study, and the policy in Indonesia came up for full de-
bate in the Lower House. Definite action was urged because of the
increasingly difficult foreign-exchange position which the political
situation was aggravating in the Indies. Again press influence from
rightist and military groups advocated forcing the issue.
In Batavia, van Mook was authorized to proceed with the imple-
mentation of the February 10 proposals for the time being as best
he could, and to consult with all regional and population groups in
the Indies for the reorganization of the islands on a federal basis
within the Kingdom. It was probably felt, furthermore, that diver-
sionary action was necessary in order to shift the center of gravity
and the spotlight away from the Republic, which was already begin-
ning to solidify its position by establishing contacts abroad particu-
larly with the new Interim Government of India.
In the implementation of this policy, van Mook called a confer-
ence of regional representatives from Borneo, the Celebes and
Moluccas and the Lesser Soenda Islands (the so-called “Great East”
areas), Bangka, Billiton, and Riouw. On July 19, at Malino near
Macassar, a conference took place of forty such representatives, who
had been chosen by local electoral boards or appointed by the local
Paroeman Agoeng or Great Council, with supervisory control* over
the panel of eligible candidates exercised by the Dutch Department
of the Interior. It is interesting to note that representatives from
Java and Sumatra were not invited to attend the conference on the
official grounds that “political conditions there made a free expres-
sion of the people’s will impossible.” In reply, the Republic ex-
pressed contempt for the conference which Dr. Hatta characterized
as “a puppet show . . . whose performers were designated by the
Netherlands Indies Government.”
After several days of discussion, the Malino Conference adopted
resolutions calling for the eventual formation of a federal state, the
THE LINGGADJATI AGREEMENT 41
United States of Indonesia, to consist of four equal and semi-
autonomous states: Java, Sumatra, Borneo and the Great East. The
conference also confirmed the plan of having a “defined period of
cooperation within the Kingdom in order to enable the U.S.I, to
create the governmental apparatus without which it could not make
a free and independent decision concerning the basis on which
future relations between the Netherlands and Indonesia should be
continued.” The conference also expressed the belief that “there
ought to be lasting voluntary cooperation between the Netherlands
and the U.S.I.,” but could agree on no definite time limit for the
initial preparation period.
Again, at the Pangkal Pinang Conference in the beginning of
October, the resolutions reached at Malino were endorsed by repre-
sentatives of the European, Eurasian, Chinese and Arab racial
minorities.
Van Mook was prosecuting the Government’s proposals of Febru-
ary 10 energetically and constructively, before getting back to the
primary problem of negotiations with the Republic. Actually, al-
though some of the “rubber-stamp” accusations which the Republic
directed against both Malino and Pangkal Pinang may have been
justified, these charges overshot their mark. At Malino, in fact, the
economic bill of rights drawn up by the conference included strong
criticism of Dutch Government-sponsored monopolies and economic
privileges, particularly those formerly enjoyed by the Royal Dutch
Navigation Company shipping monopoly in the Outer Islands, and
the special position of the Java Bank. At Pangkal Pinang, one of the
Arab speakers had to be called sharply to order for derogatory re-
marks he was making about the Netherlands Indies Government.
Between these two conferences, three events took place, which
later proved of major significance in facilitating the Linggadjati
Draft Agreement. On August 13, the K.N.I.P, ended Soekarno’s
dictatorship, and Sjahrir returned to the post of Prime Minister,
heading a new Cabinet whose main change was that it included eight
instead of five members of the rightist Islamic Masjoemi Party,
which was inclined to favor a strongly antagonistic policy toward
the Dutch proposals. On August 17, the States-General in the
Netherlands enacted a law setting up a Commission General to repre-
sent the Netherlands Government in the forthcoming negotiations.
The Commission was given almost plenary powers to negotiate and
to arrive at an agreement on the spot without having to refer back
to the Hague*, as van Mook had formerly been required to do. It was
42 THE INDONESIAN STORY
expected that this additional power would expedite agreement, and
this proved to be the result. The former Prime Minister, Schermer-
horn, leader of the Labor Party and a scholarly humanist as well,
was chosen to head the Commission; the Catholic Party’s Max van
Poll, Feike de Boer, the former director of the Netherlands Shipping
Company, and van Mook rounded out the membership. At the end
of September 1946, they arrived in Batavia to begin their task which
seven weeks later was to result in the Linggadjati Draft Agreement.
Perhaps most important, a semi-official Dutch mission headed by
Dr. P. J. Koets, the Chief of van Mook’s Cabinet, made a trip to the
interior of Java, from September 15 to September 20, at the Repub-
lic’s invitation. The impression brought back by Dr. Koets was
highly favorable to the Republic, With remarkable candor, the first
high Netherlands Indies Government official to visit the interior
since the re-occupation described the order, peacefulness, productive
activity, friendliness, and relative economic prosperity prevailing in
the interior, in the face of appalling handicaps. Inter alia Dr. Koets
stated, contradicting finally and definitely many ideas which had
been generally accepted in Dutch circles:
“The general picture we saw was that of a society which was not in the
course of dissolution but which is being consolidated. … I must add
that I have had talks with many people whom I knew in former years, as
well as with young people whom I met for the first time. Each time I
asked: ‘What is for you the essential thing that has happened during the
last year?’ … I received the same answer. … ‘It is the feeling of human
dignity.’ People now realize that they are capable of doing something.
From conversations which went beyond superficialities I heard of the
fear of a return to colonial status. . . . Not so much because people feared
economic exploitation or domination, or something of that sort, . . . but
rather because of a fear that they might lose again this new feeling which
they had joyously acquired, which they had, so to speak, discovered in
themselves, and which the people feel is something so precious that they
cannot live without it. This is a reality of which we must be thoroughly
aware.”
The Koets report, coming unexpectedly from a high and responsi-
ble Dutch official, did much to improve the atmosphere of the dis-
cussions which were resumed between the Commission General and
the Indonesian delegation on October 7, under the chairmanship of
Lord Killearn. Probably more than any single event since the start
of the negotiations a year earlier, Koets’s candid appraisal awakened
a real hope in the hearts of many ardent nationalists that cooperation
THE LINGGADJATI AGREEMENT 43
and understanding with the Dutch was possible. In the total course
of the negotiations, the Koets mission and report stand as the most
shining examples of Dutch willingness to recognize changes and to
make adaptations to them.
COMPROMISE AT LINGGADJATI
It had become apparent that if Sjahrir held to his counterpro-
posals of June 17, he could not accept the reaffirmation at Malino
of the Dutch intention to separate Java and Sumatra by recognizing
Republican de facto authority in Java only. A military truce was
concluded under the sponsorship of the British Special Commis-
sioner, Lord Killearn, on October 14, between the Allied (British
and Dutch) forces under Lt. General Mansergh’s command and the
Indonesian forces under General Soedirman’s command; never-
theless, the Republic’s determination to stand by the unity of its
authority in Sumatra as well as Java became obvious after the first
discussions on October 7. Further concessions were necessary from
the Dutch, and a new formula had to be found which would also
satisfy the basic demands inherent in the Republic’s counterpro-
posals of June 17. The creative statesmanship needed for this was
not lacking and on November 12 the final compromise was reached
at a hill station outside Cheribon, called Linggadjati.
At Linggadjati, the Commission General for the first time met
Soekarno officially. Dutch policy had come a long way from its non-
recognition of the allegedly Japanese-inspired Republic. A number
of concurrent factors provided the final impetus that was needed to
bridge the gap between the two positions. The Koets report, the
pressure of the economic standstill, the pending departure of British
troops on November 30, a critical world opinion, and the galvaniz-
ing influence of Lord Killearn, all had their effect. The agreement
itself, initialed on November 15 in Batavia (though not signed until
March 1947) was a tribute to the perseverance and integrity of van
Mook and Sjahrir who had labored so long drawing its blueprint.
The weaknesses in the final solution stemmed not so much from
what it said but from what it did not say: from certain political
realities which it ignored, and from the fact that the perseverance
and integrity of its architects were not shared by its artisans.
Linggadjati and the accompanying minutes provided inter alia: 2
I. That the Netherlands Government recognize the Republic as
the de facto authority in Java and Sumatra;
2 For the complete English text of the Agreement, see Appendix, p. 175.
44 THE INDONESIAN STORY
2. That the Netherlands and Republican Governments cooperate
toward the setting up of a sovereign democratic federal state, the
United States of Indonesia, to consist of three states, the Republic
of Indonesia, embracing Java and Sumatra, the state of Borneo, and
the Great Eastern State;
3. That the Netherlands and Republican Governments cooperate
toward the formation of the Netherlands-Indonesian Union, to con-
sist of the Kingdom of the Netherlands including the Netherlands,
Surinam, and Curasao and the U.S.I., which Union would have as
its head the Queen of the Netherlands;
4. That the Netherlands-Indonesian Union and the U.S.I, be
formed not later than January 1, 1949, and that the Union set up
its own agencies for the regulation of matters of common interest to
the member states, specifically, the matters of foreign affairs, de-
fense, and certain financial and economic policies;
5. Finally, the Agreement provided for a mutual reduction in
troop strength and a gradual evacuation of Dutch troops from Re-
publican areas as quickly as possible consistent with the maintenance
of law and order, and for the recognition by the Republic of all
claims by foreign nationals for the restitution and maintenance of
their rights and properties within areas controlled by the Republic.
On paper, at least, Linggadjati appeared to concur with most
of the Republic’s demands as stated in Sjahrir’s counterproposals of
June 17. The counterproposals had demanded the recognition of
Republican de facto authority in Sumatra as well as in Java, and
Linggadjati endorsed the Republic’s standpoint. Furthermore, ac-
cording to the Agreement, the U.S.L would be a sovereign demo-
cratic state and an equal partner of the Kingdom, rather than a
partner of the Netherlands within the Kingdom as the Dutch had
proposed. From a purely political point of view, the Netherlands
seemed to have made the greater concessions. Nevertheless, it had
maintained its basic, minimum requirements, i.e., keeping Indonesia
under the Crown (which itself would acquire a dual function as
sovereign of the Netherlands and “head of the Netherlands-Indo-
nesian Union”), and reorganizing the Indies on a federal basis ac-
cording to the Malino plan, with the Republic as one of several
constituent states.
The Agreement had two main and vital weaknesses which were
to occasion a rapid degeneration of the situation up to its final ratifi-
cation by the Netherlands and the Republican Governments, and
even after its signing on March 25, 1947. In the first place, Linggad-
THE LINGGADJATI AGREEMENT 45
jati referred continually to cooperation between the Netherlands
and the Republic toward the construction of the U.S.L and the
Netherlands-Indonesian Union; cooperation in the reduction of
military forces and in the regulation of economic matters. Despite
the Agreement, there were still many strong elements on both sides
which were not yet ready for such cooperation, largely because they
lacked the conviction that the other party was sincere and trust-
worthy. In this sense, Linggadjati, whatever its craftsmanly states-
manship, really represented only a somewhat premature agreement
to agree.
Secondly, Linggadjati called for a federal U.S.L to consist of three
semi-autonomous states, the Great East 3 and Borneo as well as the
Republic. It implied a paper equality of areas which are not, cannot
and will not be equal economically, politically, or culturally. In the
first place, Java and Sumatra together contain about 85 per cent of
the total Indonesian population, and at least the same percentage
of the educated Westernized intellectual group. Furthermore, before
the war they accounted for between four-fifths and nine-tenths of
the total export and import trade of the whole Indonesian archi-
pelago. 4 The potential economic wealth of Sumatra, moreover, is
probably greater than that of the whole remainder of the archipelago,
with the possible exception of the unexplored vastness of New
Guinea. Compared with the extremely top-heavy and unbalanced
federal state envisioned by Linggadjati, the United States of America
was at its inception a federation of equal parts.
3 At Den Pasar in Bali on December 18, 1946, 60 representatives of daerahs, or
regions, and 15 representatives of racial, cultural, social and, economic groups through-
out the “Great East,” convened at the call of the Netherlands Indies Government to
draw up a constitution for a new State of East Indonesia, according to the Malino
plan. Van Hook’s intention was to go ahead with the projected plan for a federalized
U.S.I. while final word concerning the Linggadjati Agreement was still pending in the
Netherlands.
According to the constitution of December 24, 1946, the new state was to exercise
some initial local autonomy, but until the formation of the U.SJ., all matters per-
taining to foreign affairs, defense, finance, trade, education, industrial and economic
policy, public works, and so on, would be under the control of the Netherlands Indies
Government. The Constitutional Convention chose the docile Balinese, Soekawati, as
President and selected Macassar as the capital of the new state.
The Republic interpreted Deri Pasar as a side-show apart from the main negotia-
tions, and as a violation of the spirit if not the letter of Article 2 of Linggadjati,
which provided that the “Netherlands and Republican Governments will cooperate in
the formation of … the U.S.I.” The Republic felt that “East Indonesia” had been
set up unilaterally, rather than cooperatively, and that the new state was simply a
Dutch-controlled puppet with no will of its own.
4 In 1939, approximately 85 per cent of the Netherlands Indies* exports came from
Java and Sumatra, and approximately 90 per cent of total imports were for these
areas.
46 THE INDONESIAN STORY
On March 25, 1947, the Agreement was signed. At the time it was
openly stated that both signatories bound themselves to different
interpretations of the terms “cooperation” and “federal.” The
Netherlands Government assumed that cooperation with the Repub-
lic nevertheless implied a continuation of Dutch leadership and sole
responsibility pending the formation of the U.S.I., while the Re-
public interpreted the term to mean joint responsibility and mutual
consultation in the setting up of the projected federation. Moreover,
the Dutch interpreted the term “federal” to mean equal states with
equal voices tuned in key with that of the Netherlands; while the
Republic interpreted it to mean that a federal U.S.I, did not deny
either the Republic’s own primacy among the component parts b}
virtue of its greater political and economic wealth and maturity, nor
its equal position as co-sponsor of the U.S.I, along with the Nether-
lands Government.
These basic and vital differences in interpretation made the out-
look cloudy. As a protest against acceptance of the unworkable and
unsettled terms, and the difficulties they foreshadowed for the future,
de Boer, one of the most practical and liberal Dutch figures in
Indonesia, tendered his resignation from the Commission just prior
to the signing. The difficulties envisioned by de Boer were not long
in materializing, for, although it was a remarkable and tangible
instrument of compromise and statesmanship, Linggadjati was only
a bare beginning of the adjustments which had to be made before
Indonesian-Netherlands relations became stabilized on a new foot-
ing. Sixteen months of tedious and nerve-wracking negotiations had
produced an Agreement which was widely regarded as a panacea
and final settlement. At best Linggadjati was only a first, if vital,
step toward the political and economic reorganization of Indonesia.
The rapid and critical degeneration of Indonesian-Dutch relations
after Linggadjati leading to Sjahrir’s resignation on June 27, 1947
and the outbreak of Dutch police action in July resulted not so
much from what the Agreement said, but from what it failed to say,
and from the absence of a real meeting of minds on the fundamental
questions of cooperation and federalism. Political crises were to de-
velop continually in the following months over the issues of a pro-
posed Interim Government, a joint Dutch-Indonesian police force,
a joint cease-fire order, and other practical questions. As one issue
was resolved another was to take its place, while lurking in the back-
ground and abetting each successive difference was a mutual distrust
of motives and intentions.
PART II
THE REPUBLIC IN OPERATION
CHAPTER FOUR
POLITICAL ORGANIZATION
OF THE REPUBLIC
Throughout the tedious and protracted diplomatic
negotiations, the Republican Government managed to strengthen
and solidify its position by increasing its contacts and friends abroad
and by extending its control and authority at home. When, finally,
the negotiations regarding the implementation of the Linggadjati
Agreement were broken off after several earlier premature crises,
and Dutch armed forces undertook a program of “limited police
action” on July 21, 1947, the Republican Government was already
in charge of a functioning and effective organization whose poten-
tialities were still bright despite the initial military setbacks it sus-
tained.
Moreover, when Dutch military operations began, the Republic’s
position was considerably stronger and more firmly grounded than
had been that of the revolutionary Vietnamese Government of Ho
Chi Minh when French forces began their unsuccessful drive in
Indo-China sixteen months earlier. During the two years since its
birth, the Indonesian Republic had given rise to a functioning po-
litical organization with unofficial representation in the Middle East
under its Foreign Minister Hadji Agoes Salim, in India, and in
Australia; with a financial mission on its way to the United States
under Dr. Soemitro Djojohadikoesomo, an Indonesian economist
and head of the Banking and Trading Corporation; with many
friends in England and in the United States; and with its former
Prime Minister, Soetan Sjahrir, embarking on a world tour to ce-
ment these friendships and plead the Indonesian cause.
At home, the Republican Government had centralized the com-
mand of its armed forces. It had shipped more than 60,000 tons of
rice to India in exchange for textiles and agricultural implements,
and had made initial steps toward putting into effect its plans for
public works and reconstruction within the interior of Java and
pjO THE INDONESIAN STORY
Sumatra. The Government had formulated plans for a large-scale
migration of population from overpopulated Java to underpopu-
lated Sumatra. Finally, the Republic had made some progress in its
control and rehabilitation of the sugar, rubber, quinine, and textile
industries and had expressed the outlines of its economic policies to-
ward labor relations, banking, foreign investment, and foreign trade. 1
The Government which had been responsible for these apprecia-
ble advances under the most trying pressures from both left and
right still was an amorphous organization that had evolved from the
original Constitution more as a response to changing circumstances
and needs, than as a direct fulfillment of that Constitution.
Adopted by the Commission for the Preparation of Indonesian
Independence on August 18, 1945, the somewhat vague and hastily-
framed Constitution provided for a representative “Congress of the
People/’ to consist of both regional delegates and popular delegates,
the latter in a body to be called the “Council of Representatives.”
The Constitution placed broad powers with the President, who was
made Commander-in-Chief of the Armed Forces, and who was
“vested with the power of government,” assisted by his Cabinet and
by an advisory Council of State. However, final sovereignty was de-
clared to rest with the people and, through them, with the Congress
of the People. 2
The Preparatory Committee stated, in a transitory provision of
the Constitution, that under the emergency conditions of August
1945, when the Indonesian Declaration of Independence was made,
the powers of these organs [i.e., the Council of State, Congress
of the People and Council of Representatives] “will be exercised
by the President, assisted by a National Committee” appointed by
him. 3
The present political organization of the Republic has, in fact,
evolved more from this transitory provision of the Constitution than
it has from the Constitution itself. As a result of this evolution, the
political mechanism of the Republican Government has come to
revolve around three basic entities: (1) the President, (2) the Prime
1 See Chapter 5.
2 See Chapter I and Chapter II of the Constitution for a statement of the people’s
sovereignty and the powers of the Congress of the People. Chapter III enumerates
the broad powers reserved to the President. The meaning of the term “power of
Government” is yet to be interpreted clearly, since it might appear to conflict with
the ultimate sovereignty of the State which the Constitution reserves for the people.
It seems probable that the Constitution is referring to the “executive” power of
government in this regard. See Appendix, p. 165.
3 See Transitory Provision IV, Appendix, p. 171.
POLITICAL ORGANIZATION OF THE REPUBLIC 51
Minister and his Cabinet, and (3) the Central National Indonesian
Committee or K.N.I.P. (Komite Nasional Indonesia Poesat) repre-
senting the political parties. 4
Of the three, the President was probably the strongest single fac-
tor. Not only does the President stand at the helm of the Republican
Government, but the personality of President Soekarno was, for
large masses of the Indonesian people, the incarnation and symbol
of Indonesian nationalism. In the words of Dr. Koets, the Chief
of the Dutch Cabinet in Batavia:
“Soekarno’s influence on the masses and on certain sections of public
opinion places him in a real position of authority. To the intellectuals,
young and old alike, he is the symbol of a realization of the ideal of in-
dependence. The representation of national unity in his person is a force
that is generally regarded as irreplaceable and indispensable at this stage
of the struggle for freedom.” 5
While Soekarno was commander-in-chief of the armed forces, and
while he had the power to enact law in the form of Presidential de-
crees without initial recourse to any governmental agency, 6 the
primacy of his office in the Republic derives more from his position
as the symbol of the nationalist movement and as the major influence
keeping dissident nationalist elements within the Republic, than it
does from the actual legislative and executive powers which he
exercises.
In practice the scope of Soekarno’s actual execution of his powers
was limited by two factors: first, by the activity and behind-the-
scenes influence of his trusted colleague, Vice-President Mohammed
Hatta, who acted as an assistant rather than a Vice-President, and
who handled the day-to-day internal administration of the Republic;
and second, by the alteration of the original governmental form
4 The Vice-President of the Republic, while exerting very strong powers, is not
treated as a separate unit, since his powers are actually delegated Presidential powers
and can thus be considered as part of the President’s prerogatives.
5 Report of Dr. P. J. Koets after his return from a mission to Djokjakarta. Quoted
from the Netherlands Indies Government Information Service Release, October 16,
1946, Batavia.
6 The K.N.I.P. was endowed with legislative powers by Presidential decree in October
1945. While the K.N I,P. has asserted its right to review Presidential decrees, its only
attempt to enforce this right occurred in March 1947, in the matter of a Presidential
decree increasing the size of the K.NJ.P. in order to secure support for the Govern-
ment’s policy of negotiation and compromise with the Dutch, according to the Ling-
gadjati Agreement. The K.NJ.P., however, finally withdrew its veto of Soekarno’s
decree at that time, when both Soekarno and Hatta threatened to resign if the move
were rejected. The speech containing this threat of resignation was actually made to
the KJ^.LP. by Hatta.
52 THE INDONESIAN STORY
which called for an American-type Cabinet, chosen by and responsi-
ble to the President. In its place, a continental-type Cabinet was set
up, chosen by and responsible to its Prime Minister who, in turn,
was selected by the President with the K.N.LP.’s consent, and who
was made directly responsible to the K.N.I.P. after he took office.
The reason behind this unexpected alteration in the govern-
mental form, which took place only three months after the Constitu-
tion had been adopted providing for a Presidential Cabinet, is to be
found in the policy which the Netherlands Indies Government
adopted when it returned to Batavia in the fall of 1945. Refusing to
negotiate with Soekarno or Hatta on the ground that they were
Japanese collaborators, the Dutch indicated their willingness to con-
duct informal discussions with a high and competent Republican
official who had no taint of collaborationists
In November 1945, therefore, President Soekarno and the K.N.I.P.
changed the governmental set-up by a Presidential decree which was
first debated in the K.N.I.P. This decree provided that the post of
Prime Minister be instituted in the Government, and a ministerial
Cabinet be selected by and responsible to the Prime Minister. The
Prime Minister, in turn, would be selected by the President with
the K.N.I.P.’s consent, and would be directly responsible to the
K.N.I.P. Soekarno’s own Cabinet was thereupon dissolved, although
several of the ministers, including Amir Sjarifoeddin, accepted port-
folios in the new Cabinet; and Soetan Sjahrir was appointed the Re-
public’s first Prime Minister. Sjahrir was chairman of the K.N.I.P.’s
influential Working Committee and had a spotless record for the
occupation period. He was now empowered to conduct negotiations
with the Dutch and British in regard to the fundamental question
of Indonesia’s future political status.
Although Sjahrir also held the post of Minister of Foreign Affairs,
it was in his position as Prime Minister that he handled all negotia-
tions with the Dutch. This fact was substantiated when Sjahrir re-
signed on June 27, 1947. At that time, the Foreign Affairs portfolio
passed to the redoubtable Hadji Agoes Salim who was in Cairo,
while the post of Prime Minister and with it overall direction of
the continuing negotiations with the Dutch passed to Sjarifoeddin.
It is thus clear that the position of Prime Minister in the Indonesian
Government was instituted as a concession to the requirements of
the diplomatic situation, although not provided for of in any way
referred to in the Constitution.
Most high officials of the Republic agree that th’e Constitution
POLITICAL ORGANIZATION OF THE REPUBLIC 53
may have to be modified in some respects when more stable con-
ditions have been established; and it seems likely that one modifica-
tion will involve the final incorporation of the continental minis-
terial system into the Constitution. However, in the application of
this system, the Cabinet will have acquired certain features peculiar
to it and peculiar to the Indonesian political scene.
The Prime Minister’s Cabinet has come to have a dual function,
both parts being equally important. On the one hand, each minis-
ter is charged with the running of his particular ministry. In the
Cabinet headed by Sjarifoeddin after June 1947, the Prime Minister
also was charged with the running of the Defense Ministry; A. K.
Gani was Deputy Prime Minister as well as heading the Ministry of
Economic Affairs; Hadji Salim became Minister of Foreign Affairs;
Wondoamiseno, Minister of Home Affairs; Soesanto Tirtoprodjo,
Minister of Justice; A. A. Maramis, Minister of Finance; Setiadjit,
Minister of Information; J. M. Leimena, Minister of Public Health;
Soeprodjo, Minister of Social Affairs; and Laoh, Minister of Public
Works. 7 In this role, each minister handles the particular adminis-
trative responsibilities of his ministry.
In addition to this role, the Cabinet plays a vital and unique
collective role as the Prime Minister’s index of the support he can
expect to find among the several political parties for any policies he
m^y propose. In this role, the Cabinet functions as a sort of pre-
liminary round-table where the Prime Minister can find out how
party sentiment stands vis-i-vis his prospective plans. The impor-
tance of this function can only be fully understood when it is real-
ized that of the four Cabinets which the Republican Government
had between November 1945 and the latter part of 1947, three of
which were selected by Sjahrir and the other by Sjarifoeddin, not
one had a majority or even a plurality of posts occupied by members
of the Prime Minister’s own party. In fact, the Socialist Party of
Sjahrir and Sjarifoeddin had at no time held more than one-fifth of
the total positions, including both Ministers and Vice Ministers
with and without portfolio.
Thus, each Cabinet was a coalition Cabinet. Both Sjahrir and
Sjarifoeddin scrupulously observed the practice of choosing their
Cabinets from the leaders of the several political parties, although a
minimum of six seats, in the total Cabinet of between 25 and 35,
was in each case kept for prominent non-party nationalist leaders.
7 Mr. Setiadjit, the leader of the Labor Party, also became a Deputy Prime Minister
under Sjarifoeddin and Gani. For the composition of the later Cabinet, see p. 150,
54 THE INDONESIAN STORY
It is thus by virtue of their positions as party leaders rather than
as Cabinet Ministers that the top members of the Cabinet exert
their main influence on the formulation and execution of Republi-
can policies. Thus, among 1947 office-holders, Gani was chairman of
the strong Nationalist Party; Setiadjit, the second Vice-Premier, was
chairman of the Labor Party; Wondoamiseno and Hadji Salim both
were prominent leaders of the progressive wing of the large Mas-
joemi Party; and Dr. Leimena was a leader of the Christian Party.
As will appear more clearly in the discussion further on, the
political parties and the religious, youth and labor organizations
represented in the K.N.LP. constitute the popular element in the
Republican Government, and tentatively represent the link with the
people, in whom the Republican Constitution vests ultimate sover-
eignty. Because of the vital role which the parties play in the Gov-
ernment, and because of the unavoidable coalition nature of his
Cabinet, the Prime Minister must use his Cabinet as a sounding-
board for those policies which will be finally decided upon only by
the full party representation in the K.N.LP. It is for this reason
that Sjahrir and Sjarifoeddin, while conducting negotiations with
the Dutch, often had to modify or withdraw commitments to the
Netherlands Government which they had tentatively made, after a
Cabinet session revealed to them that the parties would probably not
support the proposed commitments. While the Prime Minister stood
at the helm of his own Cabinet, his relationship to it was a uniquely
consultative one and a relatively dependent one. His strength and
the practicability of his commitments were dependent on the reac-
tion and support of his Cabinet, or more particularly on the reaction
and support of the political parties and other groups which the
Cabinet represented at the time. Sjahrir and Sjarifoeddin both had
extensive powers in their negotiations with the Dutch, but these
powers derived from a coalition party support which had to be re-
ferred back to at all times of crisis. This political fact was at least
partly the explanation behind the so-called “dilatory tactics” of the
Republic during the course of its negotiations. It was one factor
which exhausted Dutch patience to the point where the blow-up of
July 21 resulted.
As with most European coalition Cabinets, the Indonesian system
had its weaknesses, which became most apparent at times when
immediate decision was required. It appears likely that the coalition
Cabinet system will continue in the Republic for some time to come,
at least until some basis for direct popular representation has been
POLITICAL ORGANIZATION OF THE REPUBLIC 55
put into effect, as suggested but not specifically provided for in the
Constitution.
Until that happens, the only representative body in the Govern-
ment is the K.N.I.P., which is appointed by the President, and which
represents political parties, religious, youth and labor groups, but
not the people directly. As long as the K.N.I.P. remains such a di-
versely and indirectly representative body,* without one dominant
party or group, it is to be expected that the Indonesian Cabinet will
be of the coalition type.
THE CENTRAL NATIONAL INDONESIAN COMMITTEE
The first session of the Central National Indonesian Committee,
or K.N.I.P., took place on August 29, 1945, and consisted of one
hundred and twenty delegates appointed by President Soekarno
from the outstanding Indonesian party leaders, as an advisory body
in accordance with the fourth transitory provision of the Constitu-
tion. At its second session in October, the K.N.I.P. acquired legis-
lative authority by a Presidential decree and selected a Working
Committee (Badan Pekerdja) of seventeen members to continue in
permanent session to handle the new and expanding powers which
the larger body was acquiring. As the powers and composition of the
K.N.I.P. grew in size and scope, and as the diplomatic situation came
to require more and more decisions by the K.N.I.P., the Working
Committee tended to become more and more influential. Consisting
of a cross-section of party representatives drawn from the K.N.I.P.
itself, the Working Committee remained in permanent session,
whereas the total K.N.I.P. membership was convened two or three
times a year, or when called by the President. It was the Working
Committee which both Sjahrir and Sjarifoeddin consulted (in addi-
tion to their Cabinets) before making any final commitment to the
Dutch.
The Working Committee and the Cabinet have thus functioned
to mirror party sentiment for the Prime Minister, and incidentally
as reciprocal checks on one another in providing a true image of
that sentiment. While the Working Committee has come to act for
the K.N.I.P., it is the larger body itself which must vote a final ac-
ceptance of any major policy decision before it is accepted as law.
For example, in March 1947, at its session in Malang, the K.N.I.P.
voted its acceptance of the Linggadjati Agreement which the Prime
Minister had already negotiated on a draft basis with the Dutch. In
general, if the Prime Minister has consulted and appraised his
56 THE INDONESIAN STORY
Cabinet and the Working Committee closely, he can be fairly sure
in advance of the vote which the KJN.I.P. will turn in.
The K.N.LP., it should be recalled, has become a heterogeneous
group of presidentially appointed representatives totaling more than
four hundred members. While its broad base and diverse compo-
sition hamper its efficiency, and while it might be streamlined
when political conditions come to be stabilized, its size and diversity
are likely to continue for some time. Until some system of suffrage
is applied, and a real, direct representation of minorities can take
place on an elective basis, the President will probably maintain the
ultra-representative character of the K.N.LP. in order to retain as
much indirect contact as possible with the large, diversified and non-
vocal population of Java and Sumatra,
Despite its motley composition, the K.N.LP., as it functioned in
its first two years, can be considered as divided into two main party
blocs which were responsible for most of its decisions as well as for
those of the Working Committee acting in its place. On the one
hand, there is the Sajap Kiri or Left-Wing Group, consisting of the
strong Socialist and Labor Parties, the Communist Party, and the
Socialist Youth Organizations or Pesindo., and generally supported
by the Central Organization of Indonesian Labor (Sentral Organisasi
Boeroeh Seloeroe Indonesia) or S.O.B.S.L, 8 the League of Small
Farmers (Barisan Tani Indonesia) or B.T.I., and almost all of the
separately represented so-called “People’s Armies” (Laskar Rajaf).
This bloc generally commands a total of approximately two hundred
votes in the K.N.LP.
The Sajap Kiri has provided the major support for the Sjahrir and
Sjarifoeddin Cabinets and has favored a policy of moderation, nego-
tiation, and compromise with the Dutch. It is, moreover, this single
major issue of negotiation with the Dutch around which the unity
of the Sajap Kiri has been built. On the other hand, the economic
and social views of the Sajap Kiris constituents vary widely from
extreme left to center, with the Communists still advocating the
doctrine of class struggle, and the stronger Socialist Party favoring
gradual and peaceful socialization of the means of production. De-
spite these variations, it can be said that the left-wing parties stand
8 The S.OJJ.S J. is closely related to, but is independent of, the Labor Party. While
both are represented in the K.N.I.P., the S.O.B.S.I. is regarded as a federation of labor
aiming^ at the protection of labor’s rights. It is not, strictly speaking, considered to be
a political party. Similarly, the B.TJ. is an organization designed to protect the inter-
ests of the small farmer It also is represented in the K.N.I P., and its delegates gener-
ally vote with the Sajap Kiri bloc, although again the B.T.I, is not considered to be a
political party. See pp, 68 ff.
POLITICAL ORGANIZATION OF THE REPUBLIC 57
for a moderate socialistic state and a planned economy with Govern-
ment control of public utilities and transportation, and with exten-
sive labor and social legislation.
In addition, the Sajap Kiri parties also stress a policy of coopera-
tion with foreign nations and appear to be fully aware of the need
for foreign investment and expanded foreign trade In the economic
rehabilitation of Indonesia. At the same time, these parties stress
the need to have the Government scrutinize foreign investment and
trade in order to guard against the possibility of unfair exploitation.
These economic policies, which to a large extent are also advocated
by other parties outside the Sajap Kiri, constitute in effect the ex-
plicit and implicit policies of the Republican Government itself.
They will be discussed more fully in the following chapter.
The Sajap Kiri parties also have tended to favor a widespread
program of education, particularly of education along technical
lines, in order to build up the critically short supply of trained per-
sonnel which the Republic needs and will need in the future. The
Sajap Kiri group has increasingly tended away from the Taman-
Siswo system of education which they have come to consider imprac-
tical and visionary. 9 Instead, the Sajap Kiri parties have favored a
new system of education advanced by an Indonesian pedagogue
named Mohammed Sjafi. This system aims at technical and creative
as well as cultural education and is modeled more along the lines of
Americarrand European progressive principles than along the tradi-
tional Taman-Siswo pattern. Under Sjafi’s guidance, the new system
has been functioning and gaining increasing support in Kayu Tanam
on the West Coast of Sumatra.
Lined up against the left-wing progressive parties in the K.N J.P.
is the so-catled right-center bloc: the Benteng Republik or “Repub-
lican Stronghold.” There are two major components in this bloc:
the Masjoemi 10 or Islamic Party, with its numerous allied youth
organizations, which is the largest single political party in the Re-
public, claiming almost ten million adherents; and the strong Na-
tionalist Party (Partai Nasional Indonesia) or P.N.L In addition, this
group has been supported by the People’s Party (Partai Raj at) and
the large, militant Pemberontakan, led by the rabid firebrand; Soe-
& The Taman-Siswo was founded by the old-time nationalist, Dewantara, who was
Soekarno’s first Minister of Education, but who has since retired into political obliv-
ion. This system advocated a sort of Aristotelian “peripatetic”* schools, with a major
canicular emphasis on Indonesian culture and tradition.
i@ Standing for: Madjolis Sjoera Moslimin Indonesia or Indonesian Council of Mos-
lem Law.
58 THE INDONESIAN STORY
tomo. 11 The combined strength o the Benteng group in 1947
amounted to approximately one hundred seats in the K.N J.P. 12
Throughout the two-year negotiations with the Dutch, the Ben-
teng bloc constituted the major opposition to the Government’s
policy of compromise and concession. In the P.N.I. and the Mas-
loemi parties as the parties with the oldest nationalist heritage-
there was a particularly strong distrust and suspicion of the negotia-
tions and of Dutch intentions in general. As a result, the Benteng
group continually advocated a stronger and more militant policy
toward the Dutch than did the progressive and moderate Sajap Kiri.
Only seldom, did these parties break decisively from the Sjahrir
or Sjarfoeddin coalition Governments. In fact, through most of
the negotiations, the Masjoemi and P.N.I, have held more seats in
the coalition Cabinets than any of the other parties and exerted a
strong influence from these positions and from within the K.N.I.P.
When the K.N.I.P. voted on the Linggadjati Agreement, the Ben-
teng Republik bloc withheld its votes; but immediately after the
ratification, the bloc announced that it would support the Govern-
ment in the implementation of the ratified Agreement.
As already indicated, the division over the fundamental issue of
negotiating with the Dutch was responsible for the opposed align-
ment of the Sajap Kiri and Benteng Republik in the K.N.I.P. On
other matters, the divergence of views between the two groups has
been less clearly marked. There are, for example, progressive groups
within both the P.N.I. and the Masjoemi Parties, which favor a
socialistic state, labor legislation, and a liberal education program.
However, there does seem to be a basic difference of the approach
of the Benteng bloc, and particularly of the conservative wing of the
Masjoemi Party, to social and economic change from the approach
of the leftist parties to the same problems. As the party with the
longest history and the most solid grounding in Islamic Law, the
Masjoemi Party tends to be less receptive to social change and eco-
nomic experimentation than are the progressive, Leftist parties. Its
political attitude is nationalistic, but in a conservative and religious
sense. In this respect, the Masjoemi Party exerts a strong, stabilizing
influence which is particularly important and may be of special
significance in the future development of the Republic.
11 No relation to the founder of the nationalist “Boedi Oetomo” or High Endeavor
movement in 1908 cf. p. 3.
12 The remaining seats in the K.NJ.P. aside from those of the Sajap Kiri and Ben-
teng Republik are held by religious parties, regional and racial groups, women’s par-
ties, popular militia groups, and others.
POLITICAL ORGANIZATION OF THE REPUBLIC 59
THE REPUBLIC’S ARMED FORCES
The question has often been raised as to whether the army and the
numerous local fighting forces such as the “People’s Armies” (Laskar
Rajat) and the Buffalo Army (Barisan Banteng) constitute separate
political factions which have their own policies apart from and per-
haps even in opposition to those of the Government, and independ-
ent of the K.NJ.P.
At the time of the Republic’s beginnings, this was substantially
true. The Laskar, Banteng, and Hizboellah fighting corps arose
immediately after the Republican Declaration of Independence,
from what had been the local people’s groups trained by the Japa-
nese in the hope that these forces would stand with them against
the attacking Allied armies. Instead, immediately following the
Declaration of Independence, the people’s groups disarmed their
Japanese mentors or “accepted” the Japanese surrender in the ab-
sence of Allied occupation troops, and then set up their own separate
commands without any overall unity such as the Japanese themselves
had maintained. With the Japanese weapons which they had seized,
these local bands were largely responsible for the terror and plunder
of November-December, 1945.
When the first outbreak of terror had subsided, the local forces
went through two successive stages of development. First of all, the
Laskar became increasingly Integrated within the structure of the
expansive Socialist Youth Organization or Pesindo y which in turn
was affiliated with the Sajap Kiri. By the end of 1946, the Pesindo
had established titular authority over all the Laskar in Sumatra,
and twelve of the thirteen in Java. In many instances, however, this
authority was only titular, since there was no way for the Pesindo
headquarters in Djokjakarta to enforce Its authority on extremist
units which resisted its will and continued their militant activities.
The thirteenth Laskar the large and strong Pemberontakan of
Soetomo maintained its independence from the Pesindo and took
an open political stand on the side of the Benteng Republik in the
K.N.I.P. by advocating a militant attitude toward the Dutch. The
Barisan Banteng and the smaller Hizboellah fighting corps chose to
remain apart from political affiliations either with the Pesindo or
the Benteng Republik. Instead, these groups achieved a certain
amount of separate internal integration and centralization of com-
mands.
This was the situation which confronted Sjarifoeddin when he
6o THE INDONESIAN STORY
was appointed Minister of Defense by Sjahrir in January 1946. He
immediately undertook the task of centralizing and unifying the
Republican Army (Tentara Republik Indonesia) and the more diffi-
cult task of integrating all the different local armed groups under
the T.RJ. command, to form one central Republican armed force.
This task was not fully completed, but by May 5, 1947, Sjarifoed-
din’s work had progressed far enough partly through diplomacy
and partly through a use of force against certain bitterly recalcitrant
extremist units so that President Soekarno was able to issue a decree
providing for the unification of the T.R.I, and the Laskar, Banteng,
Pemberontakan and Hizboellah fighting forces under one central
command. On June 5, this Presidential decree was implemented by
another which installed the central command itself. Supreme Com-
mand of the Republican armed forces under the President was
vested in Lt. General Soedirman, assisted by his Chief-of-Staff, Major
General Oerip Soemohardjo, Vice-Admiral Nasir, Air Vice-Com-
modore Soeriadarma, and Major Generals Soeleiman and Djojo
Soedjono of the Barisan Banteng and Soetomo of the Pemberon-
takan. This command itself was placed under the overall direction of
Sjarifoeddin as the Minister of Defense, and finally under Soekarno,
as the Constitutional Commander-in-Chief of the armed forces.
The strength of these forces and their ability to resist the Dutch
military action of July 21 will be appraised later on. Here it may be
said that, under Sjarifoeddin’s capable direction, the Republican
military forces were unified and brought under the control of the
Republican Government. At the time Dutch military action began,
the direct political influence of the former people’s fighting groups
had been reduced to a minimum, and the irresponsible plunder
campaigns of these extremist groups had been cut down substan-
tially. The centralized command of the armed forces was, for all
immediate purposes, dissolved by Dutch penetration into Western
and Eastern Java after July 21. From the Indonesian point of view,
the necessity for preparing for an effective and ubiquitous guerrilla
warfare throughout Java and Sumatra required a restoration of the
original local command on which the irregular people’s forces were
founded. When stable conditions are restored, Sjarifoeddin, or his
successor, will again be faced with the problem of reviving a unified
military command responsible to his Ministry of Defense.
This, then, toward the end of 1947, was the structure of the Re-
publican Government at its top levels (as shown on p. 61).
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62 THE INDONESIAN STORY
This is the Government which has grown so greatly in strength
and scope between 1945 and 1948. Its accomplishments have been
extensive and have, moreover, been made under trying and difficult
conditions. And yet, the problems still to be faced by this Govern-
ment will require still greater energy, organization, and persever-
ance. The Government must, first of all, resist attempts to abridge
its authority in Java and Sumatra. It must undertake the imposing
tasks of economic reconstruction. It must attract foreign capital and
foreign technicians and yet protect Indonesian labor from unfair
exploitation by either foreign or domestic capital. It must endeavor
to spread education and to raise the pitifully low level of literacy in
Java and Sumatra. It must integrate its economic and political pro-
grams within the framework of the United States of Indonesia in
which it will presumably be the largest and strongest constituent
when the U.S.I, comes into existence, on January 1, 1949.
The Republic will have to root out the psychological complexes
and social privileges of a partly colonial and partly feudal society. It
will have to spread political consciousness among its backward peo-
ple, and it will have to re-direct the thinking of its intellectuals from
winning the nation’s independence to utilizing that independence so
as to raise the standard of living of the Indonesian population as a
whole. It must overcome the perennial danger of self-seeking among
its leaders and factionalism among its parties. It must maintain
order and build up a framework of law which it must then enforce.
It must streamline the amorphous structure of its administration, re-
vise its vague Constitution, and effectuate the provisions of the
revised Constitution which it adopts. The Republic has stood up
well and shown a remarkable degree of internal unity since 1945.
Yet during this period, the Republic’s national purpose has been
simplified by the necessity for preserving unity in order to secure
its independence. Whether it will be able to bear the more subtly
divisive burdens of self-government and party politics in normal
times remains to be seen.
This is unquestionably a large order for any government new or
old. The difficulty and magnitude of the many tasks will require
foresight, efficiency, and progressive, responsible leadership.
The question has often been raised whether the Republic is likely
to become totalitarian in the course of its attempts to solve these
difficult problems. It is the considered opinion of the author that
the chance of such a development is remote. Nevertheless, the ques-
tion requires closer examination.
POLITICAL ORGANIZATION OF THE REPUBLIC 63
It is certainly true that, as it stands after the first few years of
growth, the Republican Government is not a democratic one in the
pure sense of the word. Its only popular representative body, the
K.N.I.P., is appointed by the President; that is, its representative
character does not involve the element of direct choice by the peo-
ple. Rather, its popular character derives from the diversity and
representativeness of the delegates whom the first President, Soe-
karno, has selected. While, actually, these delegates are both diverse
and representative, this does not change the fact that they are not
elected by the people.
However, there has been a gain for democracy in that the K.N.I.P.
has constantly expanded its role in the Government. It has become
the repository of legislative authority. For, although the President
may still make law by Presidential decree, the practice has been
established whereby these decrees are subject to K.N.I.P. review at
the next session of the central body. Furthermore, the K.N.I.P. is
the recognized body to which the Prime Minister and his Cabinet
are finally responsible. Nevertheless, its source lies not in the whole
people, but in the President. A situation of this type may continue
for some time, and the representative body in the Republic, while
growing stronger and perhaps exercising a decisive influence in the
Government, may perhaps continue to be largely an appointive
body.
The reason for this prospect is to be found in the backwardness
of the Indonesian masses. With a literacy level of less than 10 per
cent of its total population of 60 million, the people in the Repub-
lican areas are still a long way from the point where they can under-
stand, or are sufficiently interested in, politics to vote with compe-
tence. As long as so few can read, that is, until the Republic’s educa-
tional plans really start to make headway, it is extremely doubtful
whether there can be any basis for popular elections in the Republic.
Some might add that, as long as there is no large middle class in
Indonesian society, there can be no broadly-based direct democracy.
The Republican Government cannot yet be considered a demo-
cratic one, in fact, despite its democratic principles. While it is a
Government “for” the people, it is certainly not “of or “by” them.
Nevertheless, this is apparently not true of either the revolution
which the Republic stands for, or the existence of the Republican
Government itself. Even the first official Dutch mission to visit Re-
publican “territories, in September 1946, brought back a report of
the apparently wide support which the revolution and the Republi-
64 THE INDONESIAN STORY
can Government had among large masses of the Indonesian people.
Dr. Koets, the leader of the mission, in fact, spoke of the “national
unity” which he had encountered.
Notwithstanding the existence of large groups within the popula-
tionwet-rice cultivators (especially in the more remote areas), la-
borers, and others which” are politically indifferent and inert, it
appears that the Republic has a widespread support throughout
both Java and Sumatra. But this popular support, while a real and
apparent factor which can be verified by talking to almost any Indo-
nesian not under duress, is of a passive type. It is definitely not a
participating support. The Indonesian people, in general and insofar
as they can be spoken of as a unit, seem to prefer a government run
by Indonesians, and in local village councils they have shown their
talent for devising effective methods of arriving at group decisions.
On a national level, however, they have not reached the stage where
they either wish or are able to take part in government. The Repub-
lican Government thus appears to be supported but not run by the
Indonesian people.
Though it is clear from the above remarks that definite qualifica-
tions must be attached to a use of the term “democratic” in referring
to the Republic, it nevertheless seems likely that there will be a
development along democratic lines, and that totalitarianism will
not materialize in the Indonesian political structure, in the form of
a dictatorship from either the left or the right. Several of the top
Republican leaders have marked personal ambitions particularly
Soekarno and Gani but in general, it is the author’s impression,
after sixteen months of continuous contact, that Republican leader-
ship is characterized by a keen sense of responsibility to the Indo-
nesian people.
There are, furthermore, several important reasons why even the
personally ambitious leaders could not even if they should try-
establish a totalitarian regime. The first factor which would impede
any incipient tendency toward totalitarianism is the existence of the
two large and strong opposing party blocs: the leftist Safap Kiri and
the conservative Benteng Republik. The co-existence of these two
blocs tends to obviate the likelihood that either one of them can
seize untrammeled power in the Government.
Within the two blocs, there are two parties which conceivably
might have dictatorial aspirations: the strongly nationalistic P.N.I.
under Dr. Gani’s leadership, and the Communist Party (Partai
POLITICAL ORGANIZATION OF THE REPUBLIC 65
Komunis Indonesia) or P.K.I., under Sardjono, Daroesman 14 and
Alimin. While the P.K.L itself will be discussed separately and fully
later on, it can be stated here that any attempt by it to seize power
would probably fail because of the combined opposition which it
would meet from both the Socialist and Labor Parties, and the
Benteng Republik. That the P.K.I, could form a Communist-domi-
nated coalition with the Socialist and Labor Parties against the
Benteng bloc is a political improbability because of the key position
of the Masjoemi Party and the great influence which that party
wields among the Moslem population of Java and Sumatra, The
Masjoemi Party has always been a foe of Communism.
Similarly, the Masjoemi Party can be relied upon to resist with
the Sajap Kiri any unilateral attempt by the P.N.L to establish its
supremacy in the Republican Government. Though neither the
most progressive, dynamic or ambitious of the major political par-
ties, the Masfoemi’s position as a conservative and stabilizing influ-
ence in the future development of the Republic can hardly be over-
emphasized. None of the other parties can risk being violently
opposed by the Masjoemi in a struggle for power because of the Mas-
joemi’s hold on the people and because of its position as the inter-
preter of Islamic law. On the other hand, it is hardly conceivable
that the Masjoemi itself might attempt to achieve a one-party dic-
tatorship. The temper of its principles, its background, its leader-
ship, and its expansive but loose organization are neither suited nor
inclined toward centralization or concentration of power. However,
while the leadership of this largest of the parries is conservative and
cautious, and definitely inclined toward resisting any attempt at
domination particularly leftist domination of the Government by
any one party, it is not unlikely that if conditions warranted, the
Masjoemi Party might come forward as sponsor of an Islamic Pan-
Asia Movement, stretching from North Africa and the Middle East,
through Pakistan in India, Southeast Asia and Indonesia.
Another factor which would tend to offset any inchoate tendency
toward totalitarianism is the absence of any strong, politically con-
scious social elite in Indonesia. 15 In the Philippines, the Mestizo
group to which Quezon, Osmena and Roxas belonged comprised a
self-conscious and powerful economic and political elite which could
and did take over the dominant governmental positions in the Phil-
14 A Minister-without-Portfolio in the Sjarifoeddin Cabinet since July 1947.
!5 This point was originally suggested to the author by Professor Raymond Kennedy,
of Yale University, a sociologist who has studied Indonesia at some length.
66 THE INDONESIAN STORY
ippine Commonwealth even before the Philippines acquired inde-
pendent status. In Java and Sumatra, on the other hand, the Dutch
carefully avoided the formation of any similar class which eventually
might act in opposition to their rule. While there is an old nobility
in Java and Sumatra, it has grown somewhat effete in the last few
generations. Its descendants are generally of two sorts: the quiet,
dignified, completely un-political princes and lesser nobles who still
retain their titles and social position as best they can in a rapidly
changing social environment; and the dynamic, aggressive aristo-
crats who have dropped their titles and joined the intellectual group
at the helm of the Republic.
There is no economic ruling clique within the Republic because
there have been so few Indonesians who have ever produced and
accumulated wealth under pre-war colonialism. There is, moreover,
no military clique or any other group which, as such, would be
likely to dominate the Government as an oligarchy. General Soe-
dirman, the commander of the military forces, was a schoolmaster
before the war, and while he and other officers are strong and some-
times hot-headed, they appear to be actually, as well as nominally,
controlled by the Minister of Defense.
In short, the only apparent upper stratum is an intellectual one,
which provides the leadership of the present Government. This
group the educated, relatively enlightened, small minority has al-
ways formed the core of the nationalist movement since its start
forty years ago. It is a group of people whose social and economic
origins and ideals are so widely different and even contrasting, that
it cannot be considered academically or practically as the homo-
geneous stuff which can form a ruling elite. While the personnel-
short Republic will need all their services to function smoothly, they
do not and cannot operate with anything approaching the unity and
group-consciousness of a true ruling class.
Finally, within the Republican Government itself there is no feel-
ing of sacrosanctness or of infallibility, nor is there any tendency to-
ward apotheosizing either the Government or its leaders. Soekarno
is devotedly admired, but he is not deified. When he issued a decree
increasing the size of the K.N.I.P. in February 1946, he was sharply
and freely criticized in the Indonesian press, and his action was
stormily debated by the K.N.LP. at its convention in Malang the
following month. Both Soekarno and the other top leaders partic-
ularly the colorful A. K. Gam are discussed, appraised and criti-
cized, often jokingly and sarcastically, by other government per-
POLITICAL ORGANIZATION OF THE REPUBLIC 67
sonnel, young and old alike. There is a spirit of respect, but not of
worship or constraint, on the part of the younger and minor officials
in the Republican Ministries toward their chiefs. All of these top
leaders-including Soekarno realize that they cannot govern with-
out the support of individuals and groups which would oppose an
attempt on their part to set up a totalitarian regime.
While in its early years the Government has only begun walking
the road toward democracy, it seems to be far enough along to
make extremely improbable a deviation toward the path leading to
dictatorship. The fact remains, however, that the constituents of the
Republic of Indonesia are, in a somewhat over-simplified sense, of
two as yet only remotely connected types: the young and old intellec-
tuals at the top and the poor, “apolitical/’ uneducated peasants and
manual laborers at the bottom of society. Until this latter mass has
been uplifted economically and socially, and until the gap between
the two groups has been narrowed and bridged by an aggressive
and flourishing middle class, Indonesian democracy will, at best, be
shallow and uncertain. The completion of this mammoth task is
likely to take several generations even under favorable conditions.
CHAPTER FIVE
ECONOMIC PROBLEMS AND POLICIES
Before entering a general discussion of the Republic’s overall
economic policies, it will be well to estimate the specific economic
progress which the Government has made since it started to function
effectively in 1945, and to examine some of the institutional plans
which it has already formulated. It should be mentioned that while
economic affairs have become of increasing importance to the Re-
public, the economic progress already made occurred against a back-
ground in which political considerations were always of primary
importance.
Most of the economic aspects and institutions to be discussed here
are canalized through the Ministries of Economic Affairs, of Finance,
or of Social Affairs, and then, finally, into the Central Economic
Planning Board, directed in 1947 by Vice-President Mohammed
Hatta. It is, thus, one of the top political leaders who wields the
greatest influence in the formulation and execution of economic
policies.
LABOR
As already mentioned, a central Indonesian Labor Organization
was formed in Djokjakarta in November 1946, called the Sentral
Organisasi Boeroeh Seloeroe Indonesia (Central Organization of
Indonesia Labor) or S.O.B.S.I. S.O.B.S.L superseded all previous
attempts by the Republic to centralize labor organization and has
come to include all labor unions active in Republican territory, i.e.,
both unions of the vertical C.I.O. type, and those of craft A.F. of L.
variety. At the time of the formation of the S.O.B.S.L, the Associa-
tion of Indonesian Craft Unions (Gaboengan Sarikat Boeroeh Indo-
nesia) or G.S.B.L, voted to go out of existence, and the craft
unions, which had constituted its membership, all joined the
S.O.B.S.I.
Under S.O.B.S.L each organization covers workers of all types
68
ECONC^flC PROBLEMS AND POLICIES 69
within a given industry. This vertical plan has already been applied
in the railroad industry, the oil industry, and the sugar, coffee, tea
and rubber industries. Separate unions covering each of these indus-
tries are now in operation within the overall framework of the cen-
tral organization. While S.O.B.S.L policy favors the formation of
these industrial unions, it also includes independent craft unions-
such as those of the weavers, tailors and chauffeurs. In the spring of
1947, the S.O.B.S.I. membership consisted of twenty-eight industrial
and craft unions, with a total membership of approximately 1,200,-
000. The separate unions and their respective branches and member-
ships were as follows: *
Name of Union
1. Health and sanitation
2. Tailors
3. Printing
4. Oil
5. Pawnshops
6. Ice
7. Radio
8. Female workers (Group)
9. Weaving
10. Cigarettes
11. Opium and salt
12. Railways
13. Mines
14. Sugar
15. Gas and electricity
16. Telephone, telegraph, and
postal workers
17. Ship and harbor workers
18. Automobile drivers
19. Bag manufacturing
20. Cattle
21. Forestry
22. Teachers
23. Public works
24. Estate workers (rubber, quinine,
tea, tobacco, coffee)
25. House construction
26. Prisons
27. Public courts
28. Banking
Total
Branches
Members
44
5,000
10
2,286
18
3,900
32
16,000
80
4,500
19
750
24
800
5
600
3
4,741
5
5,200
30
2,198
76
10,069
10,000
30,000
29
9,000
42
7,000
13
5,700
42
12,000
6
2,200
8
572
18,000
80
25,000
-
2,753
ne,
. .
1,000,000
8,450
40
8,000
. .
1,000
67
3,500
1,199,219
i Figures are from the Republican Ministry of Social Affairs, Djokjakarta, as of
March 28, 1947.
^O THE INDONESIAN STORY
The administration of the S.O.B.S.I. is governed by the organiza-
tion’s constitution. This provides for an administrative body headed
by a central bureau consisting of a board of directors, a planning
board and a working board, all of them elected by the large Presid-
ium Assembly. The Board of Directors is composed of the President,
the Secretary-General, the Vice-President, and the heads of the plan-
ning and working boards. The Board of Directors directs the policy
and functioning of the Central Bureau and, through it, of the ad-
ministrative structure. The final authority is the Presidium Assem-
bly which consists of representatives of all the member unions. In
the summer of 1947, the three top men in the S.O.B.S.I., who actu-
ally handled the policy affairs of the organization, were its President,
Soerjono, its Vice-President, Setiadjit, and its Secretary-General,
Hardjono. Setiadjit was also Deputy Prime Minister in the Cabinet
and Chairman of the Labor Party. The other two top officials were
without party affiliations or political office.
The platform of the S.O.B.S.I. is based on the following five major
points:
1. The freedom of Indonesia requires as a sine qua non the recogni-
tion of the right of Indonesian labor to organize freely.
2. While foreign investment is to be sought and encouraged in the
economic rehabilitation of Indonesia, Indonesian labor must organize
strongly in order to defend itself against unfair exploitation by foreign
capitalism.
3. Indonesian labor must direct its efforts toward furthering the de-
velopment of political and economic democracy founded on social justice
and having as its aim the welfare of the Indonesian people.
4. To help achieve political and economic democracy based on social
justice, and to insure improvement in the workers’ standard of living, the
nationalization of public utilities is deemed advisable.
5. Indonesian labor must exchange information and endeavor to estab-
lish contact with labor movements abroad.
While the S.O.B.S.L thus has as its major aim the protection of
the rights of Indonesian labor and is not, strictly speaking, a politi-
cal party, it has, nevertheless, a representation of approximately 35
members in the K.N.I.P. 2 In general, S.O.B.S.I.’s representation in
the K.N.I.P. has solidly backed the Sajap Kiri or Left-wing Group
policies, already referred to in Chapter IV. It is likely that organized
labor in Indonesia will grow rapidly in the next decade, and that
2 S.O.B.SJ/S representation is separate from the Labor Party’s representation, and
that of the League of Small Farmers, both of which organizations are indirectly con-
cerned with the protection of labor’s rights. Cf. Chapter IV, p. 56.
ECONOMIC PROBLEMS AND POLICIES 71
with it will come a vast expansion in the size and influence of the
S.O.B.S.L
BANKING AND CURRENCY
The Republican Banking System consists of five banks. At their
head is the Bank Negara Indonesia or Indonesian State Bank. This
bank has functioned as a “banker’s bank” and as the Republic’s bank
of issue since the first Republican currency was put into circulation
on October 30, 1946. At that time, the State Bank called in all the
Japanese occupation money which was still in circulation in Repub-
lican areas, and in exchange issued the Indonesian rupiah. The
rupiah which was brought into general use in the Republican terri-
tories is a coarsely-printed, easily-counterfeited currency which will
have to be replaced when better paper and printing facilities become
available. 3
The State Bank is a Government-owned bank, but it works with,
rather than under, the Republican Ministry of Finance. Its director
in 1947 was Margono Djojohadikoesomo, and its assistant director
Sabaroedin. Along with the Minister of Economic Affairs and the
Minister of Finance, these two men played important roles in the
application of the financial policies decided upon by Hatta’s Plan-
ning Board.
s The State Bank in 1947 issued quotations for the exchange of Republican rupiahs
against foreign currencies The bank-buying rate for U.S dollars in terms of rupiahs
was quoted at R. 2 10 = $1 ? while the selling rate was R. 2 SO $1. For the British
pound, the buying rate quoted was R. 8 10 = 1, and the selling rate R. 865 = 1.
For the Australian pound the corresponding quotations \*ere R, 650 and R. 6.70,
while the Straits dollar was quoted at 90 Republican cents for buying transactions and
97 cents for selling transactions.
These exchange quotations were primarily of academic rather than of practical inter-
est since there was practicalh no exchange between Republican currency and foreign
currencies at these rates Exchange between Republican and foreign currencies, to the
limited extent that it actually did take place, was at a black-market rate many times
above the quoted figures. The exchange quotations listed here must therefore be re-
garded simply as an index of the value of the Republican rupiah toward which the
Republic was striving, and which it hoped it would eventually be able to maintain
on a purchasing power parity or balance of payments basis, when trade and exports
were functioning again.
The Indonesian State Bank is apparently aware that the various nominal foreign ex-
change rates quoted for the Republican currency do not give the correct cross rates,
as may be seen from the fact that during most of that year the American dollar was
quoted at 2-10 rupiahs and the British pound at 8 10 rupiahs, instead of 8.40 ru-
piahs, which would be expected according to the parity level of 1 = $4. The State
Bank explained this as an indication of the relative special premium which the Re-
public was at the time placing on the American currency.
In connection with the counterfeiting of Republican rupiahs, an interesting case
occurred in Batavia. A Chinese was arrested by the Dutch police for counterfeiting the
easily-duplicated Republican money for use in Batavia’s black markets. His defense
was that since, according to Dutch law, the rupiah was not legal currency, he could
not legally be charged with issuing its counterfeit. He was held anyhow.
72 THE INDONESIAN STORY
Under this central bank are four depositors’ or commercial banks,
two of which are controlled directly by the Government, and the
other two of which are privately owned. One of the Government
banks, the Bank Rajat or People’s Bank, specializes in small agricul-
tural and fishery loans but extends some loans to individuals as well.
During the first quarter of 1947, the Ban k Rajat lent a total of
approximately 33 million rupiahs for agricultural and fishery loans.
The two privately owned Indonesian banks are commercial banks
specializing in larger agricultural loans and in loans for purposes
of internal trade and production. These two banks are the Bank
Nasional Indonesia, or National Bank, and the Bank of Soerakarta.
Both of them are somewhat smaller in their operations than are the
other three Indonesian banks.
Finally, there is the Perseroan Bank dan Perniagan or Banking
and Trading Corporation, established on January 1, 1947, which in
all probability will play a major role in building up Indonesian
commerce.
The B.T.C. was formed by the Republican Government for three
purposes: (1) to expedite and direct exports from and imports to
Indonesian areas; 4 (2) to furnish loans for private traders; and (3)
to make the most efficient use of the foreign exchange that is ob-
tained from exports in order to finance the most essential imports.
The Corporation is to have an authorized capital of 20 million ru-
piahs, 60 per cent of which will be furnished by the Government,
and 40 per cent of which will be obtained by selling shares to the
public. Public sale of shares had not yet taken place at the end of
the year, and since its formation the B.T.C. has functioned solely
on Government capital.
The B.T.C. was in 1947 under the direction of an Indonesian
economist, Dr. Soemitro Djojohadikoesomo, and its Vice-Director
was a Chinese lawyer, Dr. Ong Eng Djie. 5 It is intended that the
B.T.C. will eventually function throughout the Republican areas
although, to begin with, its activities were confined to Java.
It is also intended that the B.T.C. will temporarily handle the
export of those goods to which the Republic itself has title, and will
act on behalf of the Government to finance the import program
4 The B.T.C. was formed at a time when all Republican ports were blockaded by
the Dutch Navy to prevent the possible export of European-owned estate produce by
the Republic. The B.T.C.’s operations have been hampered by this blockade ever
since its inception, so that it is difficult to judge accurately the magnitude of the role
which it will play in commercial rehabilitation. That the B.T.C.’s role will be con-
siderable, however, is likely.
5 Dr, Ong also was Vice-Minister of Finance in the Sjarifoeddin Cabinet.
ECONOMIC PROBLEMS AND POLICIES 73
which the Ministry of Economic Affairs is drawing up. In both of
these respects the B.T.C. will function through the Ministry of Eco-
nomic Affairs. However, it has been stated that the B.T.C. will not
be operated as a trading monopoly. Instead, its facilities are to be
used to encourage private export and import especially through the
extension of loans to private traders. It is worth mentioning that
the B.T.C.’s task of building up private Indonesian business is a
sizable one. To the writer’s knowledge, there are no more than
a dozen large Indonesian business firms with sufficient capital and
experience to operate on their own. s
PUBLIC WORKS
In April 1947, the Ministry of Public Works began an extensive
program of repairing damaged bridges, improving and extending
irrigation works, rehabilitating roads and harbors, and constructing
new homes in the Republican areas of Java.
In an official release, the Ministry announced that new roads
would be constructed in the southern part of Java, particularly tc
facilitate interior communication with the ports of Tjilatjap, Gen-
teng, Plabuan Ratu and Tjilaut Bureun. Several of the Republic’s
few technical experts were sent to Sumatra to improve irrigation
works and roads there and to make preparations for the migration
of rural population from Java. The migration scheme will be dis-
cussed below.
Dr. Laoh, the Minister of Public Works, also announced that
housing facilities in Republican cities would be expanded and water-
supply and power systems more extensively developed in this
connection.
Once it is able to secure equipment and foreign capital, the Re-
public hopes to increase and intensify its program of public works.
It had already made the first beginnings toward implementation of
this ambitious program when the military action of July 21 broke
out. The resulting damages have handicapped the public works
program of the Republic, and have increased the magnitude of the
tasks of the Public Works Ministry,
The largest of these firms is the Dasaad Musin Concern, a holding company con-
trolling an export and import company and a textile mill. Before the war, It did a
business of about fl0,000,000 or about $5,000,00Q at pre-war rates of exchange. Mr.
Dasaad, the head of the firm, in 1947 completed a trip around the world to open
branch offices and make business contacts in America, Holland, Great Britain, France,
Switzerland and Belgium. It was thought likely that his business would expand greatly
in the next decade. In other cases, however, the B.T.C. was expected to meet more
difficulties in attempting to build up a sound and profitable network of private Indo-
nesian commercial firms.
74 THE INDONESIAN STORY
MIGRATION OF FARMERS AND LABORERS FROM JAVA TO SUMATRA
The Government in the summer of 1947 announced a plan for
the movement ‘of about 10,000 Javanese families, totaling about
50,000 people, from over-populated areas in Java to under-populated
areas in Sumatra. The plan is still only in the blueprint stage and
will have to await a political settlement before it can be imple-
mented. Its very scale, while it has given rise to criticism, is an
indication of the forward-looking planning the Republican Minis-
tries have embarked upon.
It is the Government’s intention to gather the prospective migra-
tors in the capitals of the various Residencies in Java, and to send
them to their destinations in Sumatra by way of East or West Java
ports. Each family will be allowed to take along all its possessions at
the expense of the Government, which will also endeavor to provide
the necessary equipment for the farmers to cultivate the land on
which they settle. Dr. Isa, the Republican Governor of South Su-
matra, has stated that 5,000 families can be received in the Lampong
and Benkoelen districts of South Sumatra, and that measures to
ensure the equitable allotment of land to each family are already
under consideration. To help each family get started, the Govern-
ment will give it an initial credit of 500 rupiahs.
Many Indonesians believe that success of this migration plan will
be vital for the economic development and well-being of the Repub-
lic. If a large labor force is available in Sumatra, the development
of that island’s vast economic potential may be accelerated. Large-
scale inter-island migration can also do much to relieve the pressure
on Java’s densely populated land, and to improve the living stand-
ards of its fifty million inhabitants. To aid the plan’s success the
Republican Ministry of Social Affairs which is in charge of the
planhas studied the results of the numerous migration schemes
which were unsuccessfully attempted under colonial auspices, be-
tween 1920 and 1940.
According to Abdoel Madjid, former Vice-Minister of Social
Affairs, and later Vice-Minister of Home Affairs, there were several
reasons why these pre-war plans were never successful. First, they
were always tried on too small a scale: not more than half a million
Javanese were moved to Sumatra during the entire twenty-year pe-
riod in which the plans were in operation. As a result, the migrants
were too few in number to organize effectively into prosperous com-
munities and hence began to feel nostalgic and discontented. Sec-
ECONOMIC PROBLEMS AND POLICIES 75
ondly, Mr. Madjid believes that the Dutch pre-war schemes for
migration from Java usually imolved migration of only parts ot
several Ja\anese kampongs or villages, instead of keeping village
populations intact. This had the result of separating the new mi-
grants from their elders and from the adat or customary law which
was bound up with the organization of the kampong as a whole.
Third, the Dutch plans lacked an incentive because they never pro-
vided adequate guarantees that accustomed social conditions would
be maintained and the level of economic conditions be considerably
improved through the migration.
The Social Affairs Ministry has tried to take cognizance of these
weaknesses and to make allowances for them by specific provisions
in its own plans. First of all, it is the ambitious intention of the
Ministry to handle large numbers of people as the plan evolves in
order to drain off most of the estimated yearly increase of 600,000
persons in the excess population of Java. Furthermore, the Indo-
nesian plan will not separate segments of compact Javanese village
communities but will try to transplant the whole kampong, includ-
ing the headman, the priest, the goeroe or teacher, and the members
of the kampong council. Finally, incentives will be offered to pros-
pective migrants in the form of monetary guarantees that living
conditions will be improved, and verbal assurance that the migrants
will be fully protected and aided by the Government in the exercise
of their own adat and the setting up of their own communities.
If the plan seems over-ambitious, it is recognized that its develop
ment will take time and considerable initial expense. Officials of the
Ministry of Social Affairs hope that the Republic will be able to
secure aid from abroad in financing the scheme over a period of
years. Optimism as to the possibilities of the plan’s success is running
high, notwithstanding the unsuccessful attempts which the Dutch
administration made along these lines before the war.
GOVERNMENT INDUSTRIAL ADMINISTRATIVE BOARDS
Since the latter part of 1946, four Government administrative
boards have been functioning in a managerial capacity in industry.
They were set up to direct rehabilitation and production in the
textile industry, the sugar-refining industry, agricultural estate indus-
tries, and miscellaneous industries. They were appointed by Presi-
dent Soekarno and in 1947 worked under the central direction of
Vice-President Hatta’s Economic Planning Board. Their activities
were also under surveillance by an investigation commission of the
76 THE INDONESIAN STORY
K.N.I.P., under the chairmanship of Tan Ling Djie, Secretary of
the Socialist Party and a member of the K.N.I.P. Working Com-
mittee.
While little specific information concerning their activities was
available to the public, the following facts were ascertainable. The
four boards are composed of technicians and members of the differ-
ent political parties and handle the overall direction of each partic-
ular industry in its managerial aspects e.g., labor relations, material
procurement, and so forth. The boards thus far established were:
(1) Textile Board (Badan Tex til Negara); (2) Sugar-Factory Control
Board (Badan Penjelengara Goela Negara); (3) Estate-Industries
Board (Badan Perkeboenan Negara)] (4) General Industries Board
(Badan Indoestri Negara). According to reports brought back to
Batavia by the Koets Mission and later by the International Emer-
gency Food Council sugar mission, as well as by numerous un-
official observers, the boards have made considerable progress in
their work. Under their guidance, most of the industrial plants
which could function temporarily without new equipment from
abroad were in action. The sugar mission of the I.E.F.C., in fact,
appeared to be impressed by the industrial activity it found in the
interior of Java. However, it is likely that the military action and
scorched-earth which began on July 21, 1947, will have affected
industrial recovery adversely.
RICE SHIPMENTS TO INDIA
In July 1946, the Republican Government concluded an agree-
ment with the Interim Government of India whereby the Republic
agreed to provide approximately 400,000 tons of rice in exchange
for textiles, agricultural implements, tires, and other “incentive” 7
goods which India would send to the Republic for use in economic
rehabilitation in Indonesian territories. The agreement was con-
cluded secretly between the two parties and was later presented to
the Dutch Government and British-occupation commander as a fait
accompli. Despite initial objections on the Dutch side on the
grounds that the rice was needed in Indonesia and that the agree-
ment was a violation of the legal Dutch sovereignty throughout
^ Money wages have often proved ineffective as an inducement to peasants to leave
their fields, if there were not available for purchase on local markets the kind of con-
sumer goods which the peasants had learned to value, or if such goods were too expen-
sive for then- limited purchasing power. Especially small imported household goods,
textiles, and other articles known to be attractive to potential wage earners therefore
have come to be known as “incentive goods” in business and official circles.
ECONONfIC PROBLEMS AND POLICIES 77
Indonesia since it had been negotiated with an “illegal” political
entity, namely the Republic the agreement was finally approved
with certain qualifications by both the Dutch and the British.
With India supplying the ships, obtained from the British Minis-
try of War Transport, and trucks for moving the rice from the inte-
rior of Java to East Java ports, the agreement began to be imple-
mented at the beginning of September 1946, Although the hopes of
the original agreement were never fulfilled because of transportation
and administrative difficulties which were later encountered, the Re-
public did manage to deliver approximately 60,000 tons within the
next ten months. The rice exports helped little to ease India’s criti-
cal food shortage but did help to cement India’s friendship with
the Republic: the effort on the Indonesian side later paid dividends
when, after the Dutch military action of July 21, India introduced
the subject of Indonesia to the Security Council’s agenda at Lake
Success. The rice agreement therefore was more significant as a po-
litical than as an economic measure.
LONG-RUN ECONOMIC POLICIES
In general, it can be said that the Republic of Indonesia stands
for a long-run economic program of extensive socialization. Although
the uncertainty and fluidity of current political conditions in Indo-
nesia make it impossible to evaluate the Republic’s economic poli-
cies with any degree of finality, it is nevertheless possible to make
certain reasonably accurate generalizations concerning these policies
and the direction in which they point. It is always possible, however,
that military or other developments in Indonesia may alter either the
substance of the Republic’s economic policies, or the leadership be-
hind these policies when the situation again becomes stabilized.
Moreover, precisely where these policies will fit into, and in what
respects they will have to be modified in connection with, the pro-
jected United States of Indonesia and the Netherlands-Indonesian
Union cannot yet be definitely established. It appears likely, how-
ever, that in the long run these policies may govern the economic
reorganization of the Republican areas of Java and Sumatra and
may exert a considerable influence on the reorganization of the
economy of the Indies as a whole.
The formulation of the Republic’s economic policy has been con-
centrated in the hands of the Vice-President, Mohammed Hatta,
while its chief spokesman was the colorful Dr. A. K. Gani, Deputy
Prime Minister and Minister of Economic Affairs in the Sjarifoeddin
78 THE INDONESIAN STORY
Cabinet, who represented the Republic at the United Nations Con-
ference on World Trade and Employment at Havana in November
1947. Hatta prefers to remain out of the limelight and hence has
received far less publicity than his power and influence in the
Government would normally warrant. As chairman of the Central
Economic Planning Board, he was largely responsible for charting
and planning the broader aspects of the Republic’s economic policy.
The policy directives of the Planning Board were then correlated
and enunciated by Gani, as in the case of his “Ten-Year-Plan” which
will be discussed later on in this chapter. A former medical doctor
and actor, Gani is a thoroughly likable extrovert, but not an econ-
omist. The superior technical background and education of Hatta
made it only appropriate that the top-level planning and final de-
cision should rest with him. Except for possible political changes
that cannot be foreseen, it is probable that he will have a large voice
in determining the extent to which the economic policies, as they
crystallized in the early years, may veer to the left or the right in the
years to come.
SOCIALIZATION AND PRIVATE ENTERPRISE
As has been intimated, the Republic advocates the immediate na-
tionalization of public utilities and public works, including gas,
water and electric works, railroads, civil aviation (as it develops),
telephone and telegraph communications, of banking, and of rice
mills. The Government recognizes, however, that it will not imme-
diately be in a technical or financial position to nationalize the econ-
omy as a whole; and for this reason, it intends that most of the
technical and detailed tasks, aside from those connected with utilities,
banking and rice mills, shall be dealt with by private enterprise
operating under some measure of Government control. In this
connection, the distinction made between socialization and social
control in a statement by the former Vice-Minister of Economic
Affairs, Saksono, is worth noting:
“In conformity with the policy of controlled economy, some vital in-
dustries will be taken over by the Government. However, this should
only apply to really vital industries, while other industries belonging to
private individuals . . . will be allowed to carry on, and if such were
formerly in the Government’s hands, they will be returned to the rightful
owners. Where necessary,, the industries which are thus returned may be
supervised by the Government. . . .” 8
8 Published in Ma’moer (Wealth), Batavia, Nov. 15, 1946.
ECONOMIC PROBLEMS AND POLICIES 79
It is to be anticipated that estate agriculture and private export
trade will be allowed to function, but it is the Government’s appar-
ent policy not only to exercise some control over working conditions
and wages attendant on such private enterprise, but also to exercise
close control over the foreign exchange proceeds obtained from all
exports in order to make certain that this exchange is utilized to
finance those imports which are most needed by the exchange-short
economy as a whole. Tentatively, in other words, a new sort of dual
economy 9 is envisioned, with certain fields remaining within die
purview of private enterprise including most estate cultivation,
such as rubber, coffee, tea, and perhaps sugar, substantial foreign
commerce, and petroleum exploitation and others being national-
ized and operated by the Government. While the co-existence and
“mixed company of state and private (both foreign and domestic)
capital” 10 is advocated, private capital will be subject to the social
and economic legislation of the Government in such matters as
minimum wages, land rents, working conditions, and labor relations
generally.
Foreign-exchange control is likely to continue for some time to
come, or at least until the shortage of dollar exchange on the one
hand, and the vast import requirements for economic rehabilita-
tion, 11 on the other, can be alleviated by exports or financial aid
from abroad. The Ministry of Economic Affairs has stated, in this
connection, that:
“. . . the Government should exercise authority over the proceeds
derived from exports in order that the foreign exchange be used for the
purchase of the most necessary imports. The particulars involved in the
regular operation of the exportation of goods can be turned over to
private enterprises or non-official agencies, but their sales transactions
should be officially supervised and approved by the Government. . . .” 12
MONOPOLY
In general, the Republic is opposed to monopolies and to monop-
olistic practices. It is known to be unfavorably disposed toward con-
9 In the past it was customary to speak of the almost separate functioning of modern
and largely non-Indonesianenterprise and “native” enterprise as making up Indo-
nesia’s “dual economy.”
ia Quoted from Dr. Gani’s statement to the press on economic policy, Batavia, April
8, 1947.
11 Estimated at perhaps one billion dollars.
12 From an article entitled “Commercial Policies,” appearing in Berita Perekonomian,
June 15, 1946, published in the Indonesian language by the Republican Ministry of
Economic Affairs, Batavia.
8o THE INDONESIAN STORY
tinuation of the special privileges enjoyed before the war by the
Royal Dutch Navigation Company (K.P.M.), the Phillips Radio
Company, and the Netherlands Gas Company, amo’ng others, either
in the form of government subsidy or in that of special patent or
license arrangements. While it has been emphasized that the Gov-
ernment should “always strive to bring about a close cooperation
with private enterprise/’ 13 it has also been stated that:
“The limit of authority on both sides should be distinctly drawn up,
thus facilitating the desired coordination between Government and
private enterprise. . . . Furthermore, the Government should always see
to it that this coordination is not limited to a few big enterprises as
occurred during the former restriction policy of the Netherlands Indies
Government, since this would only mean the re-establishment of monop-
olistic rights for big business. In the economic rehabilitation of Indo-
nesia, we should . . . attempt to make certain that the germs of monopoly
are forever stamped out/’ 14
In his Ten Year Economic Plan, Dr. Gani strongly reiterated the
anti-monopoly position of the Republic. It is, however, not unlikely
that the Republic may be sympathetic toward proposals that it grant
certain aid and preferences to Indonesian industries, as part of its
long-run program of developing local industry complementary to
that of agriculture.
FOREIGN INVESTMENT
Republican leadership recognizes the need for foreign capital and
foreign investment in the economic reconstruction of Indonesia.
There seems to be a realistic recognition that aid and investment
from abroad will considerably increase the pace at which reconstruc-
tion can proceed and at which the general standard of living can be
raised. Despite the planned economy aimed at by the Republican
Government and its desire to nationalize the basic utilities, it ap-
pears to be convinced that its economy can only be industrialized
and revitalized by drawing on technical know-how and equipment
from abroad, through foreign investment. 15
Foreign properties and capital remaining from before the war will
be returned to their rightful owners according to Article 14 of the
Linggadjati Agreement, except in cases where the public welfare
may require continued Government operation. In all such cases,
is From Berita Perekonomian, June 1, 1946.
i* Ibid.
15 See the Political Manifesto of the Republic, Appendix, p. 174.
ECONOMIC PROBLEMS AND POLICIES 8l
Government operation and ownership will occur after compensation
to the principals concerned, according to Dr. Gani. Furthermore, the
Republic evidently intends to take up the contractual obligations
incurred by the Netherlands Indies Government with foreign capital
before the war. In this connection Dr, Gani has stated:
“The Republican Government is not going to annul contracts with in-
\ested foreign capital and make new ones, but the companies concerned
will have to recognize the Republican Government as their partner in-
stead of the Netherlands Indies Government.” 16
While the Republic thus seems to recognize the need for foreign
investment and technical know-how, there remains among its leaders
a fear of economic domination from abroad. In January 1947, at the
Youth Congress in Soerakarta, Dr. Hatta voiced this fear when he
stated:
“In reconstructing our economy, we must deal with realities. We are
at present poor and possess only our man power, which has been seriously
decimated by the Japanese. . . . Despite our poverty, we are rich because
our soil is fruitful and can produce wide varieties of products. … In
rebuilding our economy we will have need of foreign capital . . . but we
must utilize this capital as an efficient and constructive tool, or else we
shall find ourselves once again economically dominated.”
It therefore appears likely that the Republic, while welcoming
foreign investment, will nevertheless attach certain conditions to its
use in Indonesia. For example, according to Dr. Hatta, the Republic
will not allow foreign investments to establish commercial monop-
olies. Furthermore, the Government will probably assert its right to
decide the minimum percentage of Indonesian employees which a
foreign enterprise must employ, as well as to make laws concerning
wages, hours, and working conditions that must prevail in foreign-
controlled enterprises in Indonesia.
It is generally recognized that such Government intervention in
foreign enterprises must be moderate in order not to alienate them,
but it is felt that even with a modicum of Government control, as
outlined above, Indonesia will still offer a prospect of sufficiently
high return on investment so that foreign capital will be attracted
once conditions of stability have been re-established.
In its attitude toward investment by particular nationals, there is
some evidence that the Republic is becoming acutely conscious
i Statement to the press on economic policy, Batavia, April 8, 1947.
82 THE INDONESIAN STORY
that its geographical position links it economically to those nations
on the shores of the Pacific, including those of North and South
America, and on the continents of Asia and Australia. Dr. Gani has
indicated his feeling that, while some foreign investment in Indo-
nesia will certainly come from Europe, in the future investment will
be particularly welcome from the United States and Australia, since
Indonesia must increasingly tend to shape its economy in terms of
the trade requirements of these and other Pacific nations.
OTHER ECONOMIC PLANS
Republican economic leadership envisions a program of increas-
ing industrialization, but of a sort complementary to the agrarian
basis of Indonesian economic life, rather than as a substitute for it.
There seems to be general recognition of the fact that Indonesia
must remain essentially agrarian for some time to come. However,
it is anticipated that industrialization in increasing the level of
agricultural and non-agricultural output can expedite rehabilita-
tion and help to raise the standard of living. Industrialization will
also be necessary to diversify the economy’s structure, and to shift
labor from the land to light industry. In this way, it may be possible
to increase the elasticity of supply of Indonesia’s agricultural prod-
uce in periods of changing prices, and thus to prevent a repetition
of the 1929-32 world market glutting.
Furthermore, while a seller’s market still exists for most of the
produce of Indonesia, agricultural exports can be the means of ac-
quiring the foreign exchange necessary for further industrialization.
Before any headway can be made in this direction, the current po-
litical situation must be cleared up and the economic blockade of
Republican areas be lifted.
In general, it appears likely that, in the process of industrializa-
tion, Java will be developed as the rice supplier for the rest of the
Republic in order to make the whole of Indonesia self-sufficient with
respect to minimum food requirements, while Sumatra will be ex-
ploited to furnish the export produce for sale on world markets to
provide the foreign exchange needed to finance imports. This, of
course, is a long-run policy only. For a long time to come Java will
probably continue to contribute largely to exports when a solution
of the as-yet-unsolved political problem again makes feasible exten-
sive trade with the outside world.
As part of its program of gradual industrialization, the Republic
is known to favor the formation of strong labor organizations. In
ECONOMIC PROBLEMS AND POLICIES 83
fact, it appears to regard the strength of these organizations as a
guarantee that foreign enterprises, though active in certain areas of
the economy, will not be in a position to exploit the workers. As
Dr. Hatta has stated:
“We should realize that a powerful labor organization will be neces-
sary in order to resist the attempt of foreign capital to dominate. … If
we have such an organization then we have nothing to fear [from the re-
turn of foreign properties and capital to their rightful owners]. . . /’ 17
The beginnings of this “strong labor organization” are firmly
founded in the Central Organization of Indonesian Labor or
S.O.B.S.I. (Sentral Orgamsasi Boeroeh Seloeroeh Indonesia), which
has already been discussed.
A strong labor organization, it is thought, will induce foreign
enterprises to pay adequate wages and maintain suitable working
conditions, without requiring the Government to step in. In other
words, paradoxically. Republican leadership seems to think that the
existence of a strong labor organization may thus make possible less,
rather than more, Government control in that sector of the economy.
THE TEN- YEAR PLAN
As a first step towards the clarification of its economic policies,
the Republic has formulated a tentative “Ten-Year Plan.” This was
announced by Dr. Gani to the press in broad outline on April 8,
1947, but its execution will have to await a change in the political
situation. The plan includes the following major points:
L Establishment of minimum wage rates and improvement in the
health and hygienic conditions of labor;
2. Elimination of illiteracy and expansion of educational facilities;
3. Establishment of strong cooperative organizations for peasants and
laborers, supplemented by legislation to protect the rights of wage-earn-
ers and farmers;
4. Industrialization in such a way that “a link will be maintained with
agriculture”;
5. Establishment of “a horizontal form of village industry supported
by … small state credit”;
6. Building up Indonesian export trade by initial grants of state
credit;
7. Expansion of state-owned public works and public utilities;
8. Encouragement and development of inter-island shipping, to pre-
vent the growth of shipping monopolies;
17 Quoted from Hatta’s speech at Soerakarta, January 1947.
84 THE INDONESIAN STORY
9. Appointment of foreign experts and technicians as Government ad-
visers in education, finance, economics, agriculture, transportation, in-
dustry and military affairs, but granting “no monopoly in this respect . . .
to any particular country”;
10. A new program of transmigration from overpopulated regions (in
Java) to thinly populated regions (in Sumatra);
11. Expansion of Indonesia’s international trade, in such a way as to
prevent the development of commercial monopolies;
12. Encouragement of the “mixed company of state and private (for-
eign and domestic) capital in the economy”;
13. Soliciting a foreign loan and floating an internal national loan,
to finance economic rehabilitation.
The Ten-Year Plan is, it will be seen, broad. Its economic policies
envision far-reaching and ambitious changes. They place weighty re-
sponsibilities on the young shoulders of the new Government,
responsibilities which may be borne with some prospects of success
but only if the elaborate blueprint is supplemented by efficient and
high-minded administration.
COMMUNISM
The economic policies and plans enumerated above are based on
the relatively moderate and sober currents in Republican economic
thinking. In this connection, it is worthwhile examining briefly
those forces which might given the catalysis of continuing strife and
instability in Indonesia divert the Republic’s policies more and
more to the left. In the author’s opinion these forces exist but are
still only in an inchoate stage. There is nothing in Indonesia that
can yet be called a Communist “menace,” but this does not mean
that one may not arise.
In the first place, it is worth noting that neither the S.O.B.S.I. nor
the Labor Party are controlled by Communists, although both labor
groups advocate socialistic economic policies. Politically, both groups
have backed the Republican Government and have been part of the
Sajap Kin } the Left-wing group which has favored moderation and
compromise in negotiating with the Dutch, and has opposed the
more militant stand of the Nationalist and Masjoemi Parties,.
The S.O.B.S.I. Congress held in Malang from May 16 to 18, 1947,
was given considerable publicity by the Dutch press in Batavia and
in Holland as an indication of the strong Communist influence
which, it was asserted, pervades the Indonesian labor movement. It
appears that the publicity was designed as much to discredit the
labor movement and indirectly the Republic (particularly in the
ECONOMIC PROBLEMS AND POLICIES 85
eyes of the United States), as it was to make known the truth about
Communism in Indonesia.
Of course, there were Communistic rumblings at Malang. The
featured speakers at the Congress were a group of Australian and
Dutch labor leaders, including the Messrs. Campbell and Roach,
who are active in Australia’s leftist dockworkers’ union and may
well have access to Communist Party funds, as well as the Messrs,
Blokzijl and Vijlbrief, who are known to have connections with the
party in Holland. The speeches made by this group of fellow-travel-
ers were loosely-reasoned samples of blatant incitement, but the re-
ception which they received was cool and unenthusiastic. As one
high Indonesian official said afterwards, when queried: “There was
nothing at Malang which was Communistic except certain slightly
foolish statements by foreign Communists.” While the S.O.B.S.I.
Congress at Malang may be significant as a harbinger of future Com-
munistic influence (given a prolongation of strife in Indonesia), it
can be stated that the labor movement in Indonesia is neither in the
grip nor under the influence of Communism as yet.
In appraising the strength of Communism in the Republic, it is
also worth noting that of the strongest men in the present govern-
ment none is a member or partisan o any Communist Party, Indo-
nesian or foreign. 18 On the contrary, the President, Soekarno, and
the Vice-President, Hatta, have, for substantial portions of their po-
litical careers, been associated with the rightist Nationalist Party,
of which Dr. Gani, Deputy Prime Minister and Minister of Eco-
nomic Affairs, was chairman in 1947. Of the other leaders in the
1947 Government, Sjarifoeddin, the Prime Minister, and Sjahrir are
members of the Socialist Party, and Setiadjit, a co-Deputy Prime
Minister, belongs to the Labor Party. While Sjahrir, Sjarifoeddin,
and Setiadjit all favor strongly socialistic economic policies, none of
them is connected with or leans toward Russian Communism. 19
There are, however, other points of which cognizance must be
taken in appraising the strength and influence of Communism in
Indonesia today. For one thing, three Communist members of youth
organizations in Russia, Yugoslavia, and France went into the inte-
rior of Java in May 1947, in response to an invitation which they
is In the Sjarifoeddin Cabinet, of 1947, one out of thirty-three seats was held by a
Communist: Daroesman, a minister without portfolio.
is Sjarifoeddin was jailed for one month in 1940, because of his alleged connection
with the Indonesian Communist Party. Actually, his imprisonment was because of his
chairmanship of the Gerindo, an implacably nationalistic party which advocated radical
opposition to Dutch rule.
86 THE INDONESIAN STORY
had solicited and received at the New Delhi Inter-Asian Conference
on March 23, 1947. The purpose of their visit presumably was to
make contact with Indonesian youth groups on behalf of the World
Federation of Youth Organizations, and to extend invitations to the
Indonesian groups to send delegates to the W.F.Y.O. congress in
Prague later in the year. There is little doubt, however, that the
actual scope of their visit was broader than this single mission.
There have also been rumors that a trading organization might
be set up by the Republic and the Australian Communist Party to
monopolize trade between Australia and Indonesia. The rumor ap-
pears to be highly unlikely. In reply to queries relating to it, both
Hatta and Gani have firmly reiterated the anti-monopoly position of
Republican economic policy, and have strongly denied any intention
of embarking on such a project.
At any rate, the combination of rumors and part-truths requires
a sober study of the position of Communism and the possible danger
of its spread in Indonesia. It can definitely be stated that such con-
tact with Communism as there is in Indonesia has been established
through the Dutch and Australian Parties; no active, direct and con-
tinuous contact with Russia has evidently been established as yet.
Of the two regular Russian-trained Indonesian nationalists, one
(Tanmalakka) has been in prison in Djokjakarta for his part in the
abortive coup d’etat of June 1946, and the other (Alimin Prawi-
rodirdjo) when last heard of was head of the Politburo of the Indo-
nesian Communist Party. Educated at Moscow’s Far Eastern Univer-
sity, Alimin is an important figure in the Communist Party and a
man to be reckoned with, but his influence in the Republic is con-
siderably less than that of the top men in the government already
mentioned.
That there is an inchoate Communist influence is undeniable, but
that it has reached the proportions which certain right-wing and
military circles have contended is unlikely. The Indonesian Com-
munist Party (Partai Komunis Indonesia) when observed in 1947
was still relatively moderate in outlook. It had been allied with the
Sajap Kiri in support of a policy of compromise and moderation in
negotiations with the Dutch. The P.K.I. has advocated a policy of
reconstruction along the lines set by the Linggadjati Agreement of
March 25, 1947, and has not advocated violence or extremism in the
course of the negotiations in 1946 and 1947.
It thus appears clear that the danger and this can hardly be over-
emphasizedis not that a Communist menace, or anything resem-
ECONOMIC PROBLEMS AND POLICIES 87
bling it, now exists in Indonesia, but that without an end to the
political strife and economic isolation, and without a continued ex-
pression of America’s interest in and sympathy towards the new Re-
public, 20 the Republican Government might be forced to seek its
friends and its support wherever it can find them, not only in India
and the Arab League and the countries in close proximity to Indo-
nesia, but eventually perhaps in Russia as well. The situation is not
unique; we are becoming well-versed in dealing with matters of this
type within the framework of the current w T orld-poIitical dilemma.
The Republic’s economic program is an ambitious one, and its
implementation constitutes one of the major tasks for the new
Government. It may be that with the extreme shortage of techni-
cians and trained administrators at the helm, the program is too
ambitious. Nevertheless, the contribution which the United States
can exert, in terms of material aid and economic advice, to the
successful working out of the Republic’s economic plans, can be
vital. 21 But while aid and technical advice from the United States
can certainly be of great service to the Republic, it is obvious that
Indonesia’s problems will not be solved through the expediency of
foreign aid alone. Fundamentally, the problem of establishing a
sound economic and political structure in Indonesia must be solved
by the Indonesians themselves. Foreign aid can help, but it cannot
