Indonesian Foreign Policy and the Dilemma of Dependence

Book Title : Indonesian Foreign Policy and the Dilemma of Dependence from Sukarno to Soeharto.

Author : Franklin B Weinstein

1.The Dilemma of Dependence.

As developing country Indonesia has political and economic deficiencies. Therefore Indonesia must find foreign resources to aid its development. Total self reliance means slow or even no development. But reliance on foreign aid may compromise its independence.

Frank Weinstein explores the relationship between underdevelopment and foreign policy by focusing on the difficult choice between independence and reliance on foreign support.

Indonesian leaders realize that their country's weaknesses make them need foreign assistance. They need funds, expertise, credit, loan, investment, business partners, military training and diplomatic support.

For Indonesian leaders independence means more than just free from colonial rule. Since Indonesia is a big country they believe that they should take leadership role in Southeast Asia. But it is impossible to play the role without economic, political and military muscles.

There is another factor that make the situation more complicated - political competition. Isolating Indonesia from the West means giving advantage to PKI (Communist Party of Indonesia). And that created tensions among political powers.

This book is a study of attitudes and politics. Weinstein examines the Indonesian elite's perception of the world. Then he also examines the process of its interaction with political competition to find resolution of the aid-independence dilemma. Data were collected in a series of interviews during 1969 and 1970 with members of the Indonesian foreign policy elite. They were divided among generations, political associations, and professions. They were from the army, the foreign ministry, technocrats, members of PNI (Nationalist Party of Indonesia), members of PSI (Socialist Party of Indonesia), Islamic political parties and Catholic parties.

2. First Impressions of the International System.

The 1928 generations like Hatta and Sjahrir who got Western education aware that their inferior status was a consequence of the prevailing international order. They were the first who committed to end the foreign rule and they were optimistic that there were outside aid. They were influenced by nationalist and marxist ideologies.

The 1945 generations were suspicious to the world due to their classroom experience. Political science and economic courses shaped their world view. Hans Morgenthau's Politics Among Nations made them aware of the danger of struggle for power. Economist Professor Sumitro Djojohadikusumo thought that specialization in production on the basis of comparative advantage only perpetuated existing disparities. And that international trade was strongly influenced by monopolistic elements. Prices of raw materials also decreased relative to industrial ones. But Americans education gave the optimism on capitalism. They had trust on economic development theories.

Participation on study clubs and student associations also shaped their impressions on the world. Marxist and anti colonialist writings influenced them. In brief their initial view of international system was that the dominant capitalist powers sustained themselves by exploiting Asia and Africa. And that any strong nations would inevitably seek to expand its power at the expense of the weak. But they had hopes that outside forces would help them achieve independence.

The 1966 generations received Indonesian educations that shaped their strong anti-communist view. Participation in study clubs also shaped their world view. Most of them had negative initial impressions on Marxism. Some due to family background and some due to religious training. Their most distinctive characteristic, however, is pragmatism. But they absorbed Sukarno's conception that Indonesia is a leader of nations struggling for independence in a world dominated by exploitative powers.

3.Perceptions of the Major Powers.

The United States.

The 1928 generations had positive initial impressions on the US. They were impressed by Wilson's support for self determination so they believed that the US would support their struggle for independence. The Phillippines experience made them more optimistic. Similarly, the 1945 generations also had favorable impressions on the US. American revolution, American films and disposition to self determination, were among positive sides in their view. They were disappointed when American support for the proclamation in 1945 was meager. However they felt that US helped them more than it helped the Dutch but US help was below expectations. US policy on rebels, on Irian case, on Vietnam, led to erosion of confidence. Travel to US made negative impressions worse. Most of them cited racism, poverty, ignorance about Indonesia, decadency, rudeness and excessive materialism. Three-quarters of the leaders doubt that the US would symphatize to Indonesia. US was seen as imperialist and interventionist. Therefore it was hard to rely to US to assist Indonesia.

The Soviet Union.

Most of foreign policy elite (six of eight) had a negative initial impression on Soviet Union. For them Soviet Union and PKI were no different and therefore it was unreliable partner for Indonesia. But for some of Soviet Union had a positive side because it was a threat to European colonialist. The positive impressions got better when in 1946 the Soviet Union support their struggle in the UN. The Soviet policy on Irian (West Papua) issue, rebellions and confrontation with Malaysia strengthen the positive impressions. But the negative impressions remained. they cited dictatorship, closed society, favorable to PKI. So their suspicion remained stronger than their trust.

China.

The 1928 generations viewed China with mixed emotions. They did not like the local Chinese but the Chinese revolution of 1911 made positive impression. The 1945 generations had no clear impression on China as a nation. Later they were suspicious to China when Beijing interfered to domestic policy toward local Chinese. In the 1960's they were suspicious that China backed PKI and other communist rebellions in Southeast Asia. Since 1966 China was perceived as a threat.

Japan.

The 1928 and the 1945 generations had positive impressions on Japan. They cited Japan's 1905 victory over Russia, industriousness, and economic development. So when Japanese army came in 1942 they were welcomed as liberator. But the wartime experience, no doubt, made negative impression and distrust. since 1966 japan was seen as a threat.

The foreign policy elite's world view in brief was an evolution from hope and trust to suspicion and concern. This perception is the product of experience. Exposure to the outside world produced more suspicious view. Those with the highest degree of exposure are the most suspicious ones. But religious and social economic background also play a role in shaping their world view. Domestic politics also influence their perception. In short, there were many road lead to their perception of the world as a threat to Indonesia.

4. The Nature of World Politics in the 1970's.

The Cold War.

They viewed the Cold War as an opportunity and threat. great powers gave more attention and materials to Indonesia. They took advantage in the struggle for Irian (Papua). In the 1970's they saw the threat as diminishing. Most of them thought the Cold War was caused by ideological conflict and since ideology was less important in international relations the cold War was over. But they also feared that Indonesia had to face collution of great powers that pose a threat for them. They also feared Chinese expansionism.

The Middle East conflict.

Since Sukarno era Indonesia had supported Arab countries. For Sukarno Israel is an outpost of imperialism. The support of post -Sukarno elite diminished. They did not think it as important. In brief they thought it was another evidence of a hostile world.

The Vietnam War.

This conflict was not of prime concern either. Leaders from all political spectrum saw it as an evidence of big powers pursue their interest at the expense of weaker ones. Sukarno clearly backed Viet Minh (North Vietnamese). In post - Sukarno era there were ambiguity. North Vietnamese were communist while Indonesians were anti-communist but they saw North Vietnamese as anti imperialist. for them the communist Vietnam was not a threat.

The NEFOS - OLDEFOS Conflict.

The NEFOS or New Emerging Forces for Sukarno is the "progressive revolutionary" forces included Soviet Union and "revolutionary elements" in Western countries. Most of the elite from all generations and from all political spectrum agreed with this world view. Even the bitterest opponent of Sukarno saw rich and poor countries relationship as exploitative one.

5. The Meaning of an Independent Foreign Policy.

In early 1950's " Jakarta would avoid tying itself to either Cold War bloc". For Prime Minister Ali Sastroamidjojo it involved not merely staying out of a pact but also creating a reasonable balance in Indonesia's relation with the two blocs. Active policy was understood as one marked by vigorous steps to oppose the remnants of colonialism in Indonesia and elsewhere. By early 1960 Hatta wrote that an independent foreign policy meant being "free from the influences of either United States bloc or the Communist bloc, whether the influence be of capital or ideology". Sukarno said that the independent and active policy had to be "step-by-step reflected in foreign economic relations, so that they do not lean to the West or to the East. By 1965 an active policy mean that Indonesia should take a leading role in bringing together the "progressive forces of the world in an international front for independence and peace in opposition to imperialism-colonialism". Whereas in 1950 foreign policy had been "independent and active, based on national interest and aimed at world peace" and in 1960 it was "independent and active. Anti imperialism and colonialism....aimed at promoting the interrelated struggle to win full independence for Indonesia, national independence for all the people of the world, and world peace.

For Soeharto foreign policy must serve the country's economic needs and maintain balance relationship with blocs. The elite's view, however, were ambivalent. Some of them wanted foreign policy as aid- seeking efforts while the other wanted it to be truly independent and active. Most of them defined an independent policy as maximum effort to maintain balance in relation with power blocs. Smaller numbers defined it as balanced relation desireable but not essential. About the same number defined it as just no pacts.

Most of them thought that economic aid from Communist countries is very important to avoid total reliance on the West. They also thought that Indonesia must refrain from joining a pact because pacts are ineffective and it would endanger Indonesia's independence.

Active policy means that Indonesia should play an international role in Southeast Asia and even world role. They wanted to be a leader of the third world. Most of them thought that Indonesia must take a leading role at international conferences at least in Southeast Asia. But they thought that ASEAN would not achieve anything significant within the next decade.

6. Evolving views on Foreign Aid.

1945- 1954 : First thought about Aid.

to cover the balance of payment deficit, to finance development projects, and to facilitate the purchase of rice, medicine, and cheap textiles. Foreign investments also needed. The official development plan was drawn up with expectations of foreign aid.

1954 - 1965 : Aid under Attack.

In late 1950's the attack on foreign aid grew stronger. Sukarno saw that foreign nations would retain "economic and political imperialism" and they would "suck Indonesia's blood". He saw Indonesia's failure to develop is due to foreign economic and political intervention and experiment with liberal democracy. It was time for socio- economic revolution to "transform a colonial economy into a national economy". He took over Dutch companies and in 1959 investment law was repelled. But the Eight Year Plan of 1960 relied heavily on anticipated foreign investment to finance Indonesia's economic development.

Foreign Credits.

In 1956 foreign minister Abdul Gani said Indonesia's development did not have to depend on foreign aid. The chairman of the national planning board opposed financing eight year plan with extensive foreign loan on the ground that the burden of debt repayment would be too heavy. By 1962 Sukarno warned the danger of foreign credits and underestimating Indonesia's own capital. Since 1956 Indonesia began to receive substantial amount of foreign aid from Soviet Union and East Europe.

Development Strategies.

There were also thoughts about industrialization, agricultural self -sufficiency and overcoming inflation through an increase in production.

1966-1975 : Putting Aid first.

The New Order leadership had fixed a set of economic policies which emphasized stringent monetary measures aimed at stabilization, heavy reliance on foreign loans and foreign investment. In 1969 the government inaugurated a five - year development plan with the goal of achieving self-sufficiency in rice, rehabilitating the infra structure, raising the production in export - oriented mining industries through foreign investment, and increasing production in agriculture related industries. Approximately 73% of the total financing was from foreign sources, including private investment. Close to 80% of the government's development budget was met by foreign aid.

The Price of Aid.

Indonesia must adjust its policies to the desire of the creditors. Ending conflict with Malaysia is the first case. Also cooperation with IMF to design economic development. There were also pressures from Washington to change Indonesia's position on Vietnam issue. In diplomacy there were pressures from Washington and Tokyo for Jakarta not to support China's entry to UN in 1971. Washington also sabotaged Indonesia's establishment of ambassadorial relations with South Yemen. When Singapore executed two Indonesian marines convicted of sabotage activities Indonesia was under heavy pressures to prove their commitment to a "responsible" foreign policy.

7. The need for aid and the fear of dependence.

The Indispensability of Aid.

Eighty-one percent of elite viewed aid as indispensable. They cited the insufficiency of domestic capital, the predominantly low level of education and technical skills, and the ineffectiveness of the bureaucracy. They (48%) thought that if they cut aid drastically there would be a political crisis that the government may fall. Thirty-three percent thought just slower development. Others thought there would be political crisis but the government would survive by becoming more coercive.

The Dangers of dependence.

Most members of foreign policy elite were very worried about dependence on aid. That believed that aid givers tried to influence policy for their interest. They thought that IMF's influence on economic policies was excessive. Vast majority was worried that Japan is using aid to exploit Indonesia. They believed that nations give aid to achieve their own economic and political goals.

Development Strategies and the Perpetuation of Dependence.

Most of them (62%) wanted to do more to raise production and worry ; less about inflation. They also expressed strong concern about foreign investment. They perceived the risk of dependence was dangerously high. In principle they did not reject foreign aid but they objected the terms and its apparent effect on economic development and national independence.

8. Perceptions, Politics, and Foreign Policy.

Political incentives and risks in the Indonesian system were shaped by elite's view of the world and made stronger or weaker by changes in the intensity of political competition.

The Early Years.

Hatta voiced intention to draw international support for Indonesian struggle. Sjahrir's policy was to combine military struggle with a search for foreign diplomatic support while Tan Malaka called for an all-out struggle and confiscation of all foreign factories and agricultural estates to inspire the mass to "fight as lions". In 1949 the Dutch, due to American pressures, had to agree to transfer of sovereignty to Indonesia but the terms was also hard for Indonesia. The most significant were : the Indonesian government's assumption of the debt of the Dutch administration which meant it would be paying the operations that had been carried out against the Republic. Also the retention by the Dutch of west Irian (Papua) and safeguards for Dutch economic interests in Indonesia.

Those experiences taught them that foreign powers were unreliable and that a policy of negotiating concessions which appeared to compromise the nations independence carried dangerously high political risks. The downfall of the Sukiman cabinet is a consequence of the commitment made by Foreign Minister Subardjo to win American aid.

Sukarno's guided democracy.

Leaders who advocated of putting independence first came to center stage in this period.

The Structure of political competition.

The pattern of political competition was complex, Sukarno, army and PKI were maneuvering for political advantage. They used foreign policy to maximize their political assets and minimize their weaknesses. The army needed American military aid like equipment and training. Western aid also rose their power in decision making process vis-a-vis the PKI. For PKI independent-oriented foreign policy is a way of isolating the army from their foreign sources of support. They favored aid from communist powers to balance Western influence and to keep Sukarno protecting them.

Perceptions and Politics.

Policies viewed as compromising the nation's independence in exchange for foreign support proved politically hazardous. Irian campaign gave advantage for PKI. as Soviet military aid grew, so did PKI's role. As victory over Irian was achieved through diplomacy and not military operation, PKI and Sukarno took advantage. Meanwhile the stabilization program was a threat to PKI and political disadvantages for Sukarno. Confrontation with Malaysia was profiting PKI than the army. Under guided democracy interaction between the elite's view of the world and intensely competitive political system created substantial incentives for all principal contenders to support a foreign policy that gave priority to full independence and aid-oriented policy almost prohibitive.

Soeharto's New Order.

Striking changes in policy was possible because the political incentives for carrying out confrontative foreign policy no loner existed and the risks of criticism and aid-oriented policy also diminished.

Incentives for putting aid first.

Indonesia's economic problem was very complicated. It was very difficult to mobilize local resources. The administrative machinery was in decay, corruption was rife, and ability to control distant area was limited. In the context of the Cold War an anti-communist Indonesia was a bastion Western powers. It was time to get their aid. But suspicion of the outside world remain high.

Recent trends and Projections.

The pattern would continue if there was low political competition. The sharpening criticism of dependence on foreign aid and rising social inequality, the frustration and alienation of a large segment of the political elite, and the intimation of political action to compel a change, sooner or later would lead to intensification of political competition and a foreign policy that accords greater priority to independence.

9. Conclusions : Implication of the Indonesian case.

The elite's world view as a hostile place found confirmation on their bitter experience with major powers. Their weaknesses forced them to seek aid. The two regime responded to the problem differently. The intense political competition of the guided democracy years created a strong incentive for a foreign policy that put independence first. In the much less competitive political situation of the new order, the obstacle to aid-seeking policy disappeared.

Where the foreign policy elite of an underdeveloped country perceives the world as hostile, intense political competition will lead the country toward a foreign policy that puts independence first, while less competitive situation will permit a policy taht accords priority to the search for aid.