INDONESIA: NEW FOCUS ON EXTERNAL SECURITY THREATS

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Indonesia: New Focus on
External Security Threats
DIA review
completed.
State Dept. review completed
Secret
EA 82-10092
September 1982
Copy 484
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Intelligence
Directorate of
Indonesia: New Focus on
External Security Threats
Southeast Asia Division, OEA,
are welcome and may be addressed to the Chief
This paper has been prepared b
Office of East Asian Analysis. Comments and queries
Intelligence Council
This paper has been coordinated with the
Directorate of Operations and the National
Secret
EA 82-10092
September 1982
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Secret
Indonesia: New Focus on
External Security Threats
25X1
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Key Judgments Indonesia's military leaders, while continuing to be concerned about
Information available internal threats to stability, have begun to focus on external forces that
as of 15 August 1982 could threaten the northern flank of the archipelago. They remain
was used in this report.
convinced that the long-term threat comes from China but have become
nervous that a Soviet-backed Vietnam could destabilize the region in the
near term. Kampuchea provides a case in point. Jakarta also fears that
bilateral tensions could erupt in the South China Sea where Indonesia and
Vietnam have a longstanding sea boundary dispute
This realization of possible external threats has led Indonesia to reexamine
defense capabilities along its northern boundaries, where it has vital
economic interests, including large natural gas reserves around the Natuna
Island group. Jakarta is:
? Modernizing its military forces, with increased emphasis on air and sea
defense equipment.
? Developing a domestic defense industries manufacturing capability.
? Repositioning military forces to ensure a forward defense capable ',F
25X1
ill
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di
i
l
l
h
h
fl
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y surve
ance an
nter
on a
ear
ct
ong t
e nort
ern
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.
? Stepping up bilateral defense exercises and other forms of security
cooperation with ASEAN countries, especially Malaysia.
Indonesia wants the United States to provide increased military support for
Indonesia and its ASEAN allies as a signal of US confidence in their
political stability and determination to defend themselves. From Indone-
sia's perspective, a key test of Washington's commitment to Southeast Asia
will be US willingness to sell it F-16/100 fighter-bombers.
Secret
EA 82-10092
September 198'
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Figure
Burm KaRpuchea South
A 3/ Vietnam China
Sea
ih ai~eind
Security
Belt t
Airbase of the 1 st Air Area Command
0 500
Papua
New
Guinea
Names and boundary representation
are not necessar fly authoritative
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Indonesia: New Focus on 25X1
External Security Threats
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Threat Perceptions-the Jakarta View
Jakarta's dominant security concern since independ-
ence in 1949 has focused on internal subversion or
political unrest springing from religious and racial
tension. As a consequence, military equipment and
training have been keyed to support counterinsur-
gency and riot control. Regional instability since the
fall of Saigon in 1975, however, has led Jakarta's
military leadership to focus on potential external
threats, particularly along the northern sea lane ap-
proaches, where Indonesia is ill equipped to detect
violations of its land or sea territory. Specifically,
Jakarta has pointed out to US officials its concern
over the flood of Vietnamese refugees landing unde-
tected on its South China Sea islands, an area where
Indonesia hopes to develop rich oil and natural gas
deposits.
Although convinced that the long-term threat comes
from China, Jakarta
increasingly sees a potential short-term threat from
Soviet-backed Vietnam, with which it has been em-
broiled in a boundary dispute in the South China Sea
We believe recent exposures of Soviet espionage activ-
ity in Southeast Asia have added to Indonesia's
concerns. Following the disclosure of Russian spying
in Malaysia in 1981, Indonesia was jolted by the
exposure of a Soviet spy ring in Jakarta in February
1982 and disclosures of Soviet espionage in Singapore.
The Military Response
external, in the 1980s.
to respond to any anticipated threat, internal or
Even before Indonesia began to acknowledge it poten-
tial threat from the north, Jakarta had embarked on
an accelerated five-year armed forces development
plan-the most ambitious in two decades. Until 1978
Indonesia's military development budget was less than
4 percent of the overall development budget.' The 25X1
appointment in 1978 of a more dynamic Defense
Minister, General Jusuf, provided the impetus for a
new look at Indonesia's military preparedness. Jusuf
shared with President Soeharto the desire to rapidly 25X1
organize a highly trained, well-equipped force ready
Of immediate concern was the threat of domestic
instability during the 1982-83 election period, and the
need to rapidly improve security forces for effective
riot control. Secondly, Jusuf and his deputies have
repeatedly stressed Indonesia's vulnerability to unlaw-
ful fishing by foreign trawlers and smuggling and
' The military development budget is outside the routine budget for
military expenditures and operations, and represents spending for
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 Figure 2
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Thailand
*BANGKOK
a
Kam pu?hea
PHNOM
PENH
Gulf of
Thailand
Vietnam
South
o Chi Minh City
~ China Sea
"Malaysia
n
e,io
d'ne e \ Overlapping Indonesian and
Brunei
(U.K.)
ANAMBAS
ISLANDS
Grand Rana, Airhase
Natuna
NATUNA
ISLANDS
d ,,,o n .,s,
,Pfiilippines
Malaysia
a._
Indian
Ocean
Names and boundary representation
not necessarily authoritative
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Secret
Table I
Indonesia: Defense Development Spending Since 1978 a
Fiscal Year Billions Million
(April/March) Rupiah b US $
1979/80 176
1980/81 _- 342
1981/82
1982/83
Total (billion
US $)
A Government figures for the HANKAM development budget, does
not include routine budget for HANKAM.
b Source for rupiah figures, Indonesia Financial Statistics, Bank
Indonesia.
Note: Government figures do not include extrabudgetary sources of
income for HANKAM and therefore may be significantly lower
than actual expenditures.
piracy in the vast seas of its territory versus the
country's small patrol fleet and inadequate radar
capacity to monitor such violations. Lastly, Indone-
sian officials have reported to US officials their
suspicions that overflights and submarine penetration
by foreign powers are taking place along vital sea
lanes, but they lack proof because of relatively primi-
tive surveillance and detection equipment.
In 1979 when oil export price hikes rapidly increased
Indonesia's foreign exchange earnings, Jusuf and
Soeharto saw the chance both to reequip the military
and to extend its defense potential significantly. An
equipment purchasing spree began that was un-
matched since the early 1960s under former President
Sukarno. Jakarta has boosted military development
spending, both absolutely and as a percentage of the
development budget (see table 1). According to pub-
lished Indonesian budget figures, cumulative military
development outlays since FY 1977 will reach $2.8
billion by the end of FY 1983,2 a significant amount
for the poorest ASEAN nation with an annual per
capita income of roughly $500.
Percentage Change
Percentage of
in Rupiah From
Development Budget
Previous Year
4.3
61
4.4
94
5.8
7.5
6.4
Equipment Purchases
Half of equipment purchases have been small arms,
ammunition, M-16 rifles, and major equipment items
such as armored personnel carriers needed for unit
upgrading and improving ground security. At the
same time, the long-neglected materiel needs of the
Navy and Air Force are receiving serious attention.
Some $1.3 billion has already been committed since
1977 to upgrade the capabilities of these two services
for their role in forward defense of the archipelago.
Indonesia's "wish list" with the United States alone
reflects a new air defense policy, which is to expand
significantly what is now a very limited capability to
detect and intercept intruders along the archipelago's
perimeter. Over the past two years the Indonesians
have both formally and informally expressed interest
in acquiring the Vulcan antiaircraft system, Chap-
paral surface-to-air missiles, A-10 attack aircraft,
more C-130 cargo planes, long-range maritime sur-
veillance aircraft, additional F-5E fighter/ intercep-
tors, and Sidewinder air-to-air missiles. Jakarta has
Secret 25X1
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also expressed keen interest in acquiring US-manu-
factured F-16 fighter-bombers which would measur-
ably enhance Indonesia's capability to project air-
power.' Armed with US-made Maverick air-to-air
missiles that Jakarta has requested, Indonesia's Air
Force would be the strongest in the region.
The buying spree has extended worldwide, reflecting
Indonesia's determination not to be overly dependent
on any single supplier as it was on the Soviets in the
early 1960s. US Defense Department records show
that in the last few years Jakarta has contracted for
corvettes and minehunters from the Netherlands,
missile attack boats from South Korea, submarines
from West Germany, Nomad patrol aircraft from
Australia, Thomson early warning radar from France,
A-4 Skyhawks from Israel, and Hawk training air-
craft from Great Britain (see table 2). Defense attache
reporting indicates that the modernization program,
although sometimes erratically implemented, has
been moderately successful in upgrading equipment
and improving troop performance. At the same time,
Indonesia will have to improve its logistic support
capabilities to utilize effectively new advanced mili-
tary hardware, according to defense attache reports.
Indonesia is also building up a domestic defense
industry capable of manufacturing an array of equip-
ment ranging from small arms to aircraft and naval
vessels. Minister for Research and Development
Habibie heads the small but growing interagency
Team for Study and Development of Technology. He
has focused his attention and considerable influence
with President Soeharto on developing facilities such
as an aircraft assembly factory for helicopters and
light aircraft, a torpedo factory, a modernized ship-
yard, and a rocket factory. As part of this program,
Indonesia has signed defense industry agreements
with France and West Germany. These agreements
will transfer technological expertise to Indonesia and
provide for coproduction of military-related products.
' The Indonesians want to buy the F-16/100, a model with 30
percent more combat range than the older F-16/J79. In recent
discussions with US officials, a senior Indonesian defense official
stressed that Indonesia was prepared to be flexible about delivery
schedules. He said Indonesia wanted to acquire one squadron (eight
aircraft), with initial delivery of the first aircraft in five or six years
Table 2
Indonesian Major Military Equipment Acquisitions
From 1979-81-Non-US Suppliers
Number
Purchased
Supplier
tanks
STRIMM rocket launchers
227
AMX-13 APCs armored vehicle
70
Singapore
AMX-13 APCs armored vehicle
330
Netherlands
Thomson TRS 2215 radar
2
France
Electronic surveillance equipment
Unknown
France
Communications equipment
Unknown
South Korea
Plessey ASW-2EF EW radars
Unknown
United
Kingdom
Electronic countermeasure equip-
ment
United
Kingdom
Type-209 submarines
West Germany
Fatahillah-class frigates
Netherlands
Frigate electronic control systems
Netherlands
Missile attack boats
4
South Korea
Shipboard fire and control systems
4
Netherlands
Missile attack boats
8
South Korea
Tank landing ships
8
South Korea
200-ton utility landing craft
5
Singapore
Frigate training ships armed with
exocets
1
Yugoslavia
P-92-class customs patrol boats
14
France
Customs patrol boats
24
Belgium
Search and rescue craft (32 meter)
5
France
244s torpedoes
20
Italy
51-100 patrol boats
6
Australia
Aircraft
Israel
United
Kingdom
AS-202 trainers
20
Switzerland
C-212 transports
106
Spain
C- 160 transports
3
France
PUMA helicopters
21
France
BO-105 helicopters
100
West Germany
WASP helicopters
Netherlands
Nomad transports
Australia
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Secret
In mid-July 1982 Habibie visited Washington and
concluded an "exchange of letters" with US officials,
establishing the framework for technological-industri-
al cooperation in defense-related areas. By and large,
however, the Indonesian effort to develop domestic
manufacturing capabilities is in its early stages, and
we believe Jakarta will have to overcome major
constraints, including shortages of highly trained
technical personnel, if the program is to succeed.
Nevertheless, Soeharto and his leading technocrats
have said that Indonesia is determined to move up
from solely being a Third World recipient of technol-
ogy to the status of a technologically competent
The repositioning and upgrading of military forces
along the northern flank are only tentative first steps.
According to defense attache reports, Jakarta's ac-
tions are meant to signal neighboring ASEAN states
and Vietnam that Indonesia is determined to provide
logistic support and aid should the Vietnamese move
militarily against Thailand or any other ASEAN 5X1
country.
Repositioning Military Forces
The military is relocating elements of its strike forces
from Java to the outer islands of Sumatra and
Sulawesi, in line with Jakarta's emphasis on expand-
ing its ability to project air and naval power. At the
same time, both the Air Force and Navy are upgrad-
ing and building new air and naval installations along
the strategic northern approaches to Sumatra, Kali-
mantan, and Sulawesi, installing more radars, and
increasing air and naval patrol activity from these
islands
On Defense Minister Jusuf's orders, Natuna Island is
being upgraded as a forward military base. French-
made Thomson radar is being installed near a new
extended runway, which Indonesia's military claim to
be the "best in the region." Facilities on the island
have also been enlarged to accommodate more troops
for training exercises, and a new fuel depot is being
built. From its new naval purchases, one submarine
and one patrol boat have been deployed at Natuna,
and US defense attache reports indicate one new
minehunter will patrol from the island. The Indone-
sians have already staged one major joint-service
exercise (in 1981) to test unit reaction time from
Sumatra to Natuna, and this year, according to
defense attache reports, the military wants to try
another airborne exercise in which one battalion of
some 700 men would be airlifted to the island.
Defense Cooperation
Indonesia's specific concern over the vulnerability of
the South China Sea corridor has encouraged niove.25X6
ment toward closer defense cooperation with Malay-
sia and Singapore
we o not 25X6
believe Indonesia has entered into any formal agree-
ment with either Singapore or Malaysia on joint use
of Natuna. Late in 1981 Defense Minister Jusuf told
former US Ambassador Masters that "Indonesia was
permitting both countries use of Natuna's facilities 25X1
and airspace for training." Undoubtedly these tenu-
ous agreements would be more firmly defined and
strengthened should evidence of Soviet-Vietnamese
surveillance and reconnaissance be detected by any of
these three ASEAN states.
It is clear, however, that Indonesia's cooperation with
other ASEAN countries is growing in delineating
borders and patrolling sea boundaries. An Indonesia-
Malaysia boundary agreement on South China Sea
waters concluded early in 1982. for example, was
given extensive coverage in both nations' media. At
the same time, the tempo of Indonesia's bilateral
military training exercises has increased substantially
over the past few years (see chart). Most of Indone-
sia's bilateral security cooperation is with its nearest
neighbor, Malaysia. For example, of the 14 ASEAN
exercises in 1981, 10 involved Malaysia and Indone-
sia; among the services, eight of the 14 were naval
exercises.' Indonesia, however, has responded very
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Participation
11
cautiously to Thai overtures for expanded multilateral
air exercises, probably, we believe, fearing closer
cooperation would be too provocative to Vietnam.
Other links between Indonesia and ASEAN countries
include border control operations between Indonesia
and Malaysia on the West Kalimantan-Sarawak
border, joint naval patrols by Indonesia and the
Philippines in the Sulawesi Sea and Makassar Strait,
and semiannual border meetings between Malaysia
and Indonesia focusing on the Malacca Strait region.
Trilaterally, Indonesia, Singapore, and Malaysia have
reached agreement on separating maritime traffic in
the Malacca Strait.
Despite these moves to establish a de facto ASEAN
military alliance, the Indonesian military are on re-
cord publicly against institutionalizing ASEAN de-
fense cooperation in any manner which would suggest
an overt military pact. Instead, Indonesia has joined
enthusiastically in annual ASEAN-wide intelligence 25X1
meetings, which since 1973 have been held informally
before the Foreign Ministers meet. Indonesia has also
taken the lead in promoting ASEAN-wide communi- 25X1
cations by leasing channels on its communications
satellite (Palapa) to the other ASEAN countries,
including individual military channels.
Diplomatic Initiatives
While moving ahead with its military modernization
program, Indonesia also is moving on the diplomatic
front to restrain Vietnamese expansionism. Since
1979 Jakarta has supported ASEAN diplomatic ef-
forts to get Vietnamese military forces out of Kampu-
chea. To the same end Jakarta has continued its
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serve as a bridge between Vietnam and ASEAN
because of its own historic "special relationship" with
Vietnam and its self-perceived 'ma e of leadership
within ASEAN (see appendix).
Indonesia's bilateral contacts, sometimes carried out
without prior consultation within ASEAN, have at
times dismayed and confused the other ASEAN
We believe Indonesia places priority on the settlement
of the sea boundary with Vietnam, and Jakarta's
strategy has been to keep negotiating but not concede
anything. Top Indonesian Government officials be-
lieve, according to foreign office officials, that the
adoption of the Law of the Sea Convention in New
York last April, which legitimized the archipelagic
concept, has strengthened Indonesia's hand in this
sensitive bilateral dispute.'
Prospects
Indonesia is prepared to accept some political solution
in Kampuchea that will acknowledge de facto Viet-
namese preeminence,
Although President Soeharto makes
peri~blic appeals for a Vietnamese military
withdrawal from Kampuchea, he and his military
advisers sense the inevitability of an Indochina united
in some loose arrangement acknowledging Vietnam-
ese dominance. Indonesian policy planners privately
` The archipelagic concept holds that states made up of a group or
groups of closely related islands and interconnecting waters would
have sovereignty over a sea area enclosed by straight lines drawn
between the outermost point of the outermost islands. Ships and
aircraft of other states would enjoy the right of passage through
and over sea lanes designated by the archipelagic state. In Indone-
sia's case, Jakarta would have 3 million square kilometers of
territorial waters to manage and defend under the archipelagic
state their fear to US officials that in the meantime
continued conflict in Kampuchea could lead to an
outcome threatening Indonesian security such as:
? An escalation of Vietnamese-Thai hostilities that 25X1
would force an ASEAN reaction.
? A regional Sino-Soviet conflagration brought about
by increased Soviet help to Vietnam and Kampu-
chea. 25X1
Foreign office officials privately state that lukewarm
support for ASEAN's third-force coalition is about all
Indonesia can give, and they are scornful of Singapore
and Malaysian initiatives to unite the three anti- 25X1
Vietnamese factions. Consequently, we believe Jakar-
ta will continue to maneuver quietly within ASEAN
to reach a political settlement of the Indochina dilem-
ma, which does not make Vietnam a pariah or more
dependent on the Soviets. It will also continue to
respond positively to any signals that Hanoi might
want to settle the issue peacefully. Thus, Foreign
Minister Mochtar has agreed to a request by Viet-
namese Foreign Minister Co Thach to visit Jakarta
military upgrading of its northern flank. Even if
financial constraints caused by a downturn in oil
earnings slow this process over the next few years,
Soeharto has firmly committed himself to protecting
Indonesia's strategic waterways and the enormous
present and prospective investments along the north- 25X1
25X1
Implications for the United States
Indonesia's current threat perceptions help explain the
ambivalent and sometimes contradictory signals Ja-
karta has been sending to Washington. Leading Indo-
nesian Government officials privately indicate that 25X1
Jakarta wants a close bilateral relationship, but is
consistently chary of anything resembling overly close
military cooperation with a superpower because of its
nonaligned credentials.
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In effect, Indonesia wants the United States to be
supportive, sympathizing with Indonesian and
ASEAN attempts to reach a political solution to the
most immediate regional problem, the Kampuchean
dilemma. Indonesian Government officials in the past
have informally told the United States they hope that
Washington might establish ties with Hanoi and
provide some economic aid to Vietnam, thereby shak-
ing loose the Soviet grip and its increased presence in
Indochina. At the same time, however, Jakarta offi-
cially supports ASEAN's policy of blocking interna-
tional financial assistance that would aid Vietnam's
war effort and cites Indonesia's success in preventing
an OPEC loan to Vietnam earlier this year. Privately,
Indonesian officials concede that Jakarta does not
approve of the ASEAN policy or of the notion of
"bleeding Vietnam dry.'
We believe the forthcoming visit by President
Soeharto in mid-October 1982 will emphasize Jakar-
ta's need for reassurance that the United States
considers its relationship with ASEAN, and in partic-
ular Indonesia, strong enough to let the region play
the leading role in constructing an Indochina solution.
We believe Soeharto will also stress the importance of
a systematic and synchronized approach to US securi-
ty assistance to the non-Communist nations of South-
east Asia. In our judgment Soeharto might make the
F-16/100 issue a test of Washington's sincerity to
upgrade the air defense capability of a friendly nation
such as Indonesia. Indeed, in conversations with US
officials, top Indonesian military officers note that the
United States has sold F-I6s to Venezuela, a country
they perceive under less of an external threat than
Indonesia. In narrower terms, Indonesia may request
closer bilateral cooperation in monitoring maritime
traffic along Indonesia's strategic northern security
In pragmatic terms, senior Indonesian military offi-
cials have told the United States they wish discreet
US support for their military buildup and ASEAN's.
They view regional security requiring not only eco-
nomic development but a defense capability able to
detect and deter any regional incursion. According to
Indonesians working with the US military assistance
program, US security assistance in the past has been
viewed as ad hoc, painfully bureaucratic and delayed,
and often so expensive as to encourage the policy of
diversification of suppliers in order to guarantee
timely delivery and to obtain the necessary equip-
ment.
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Appendix
Indonesia-Vietnam: The Framework
for Diplomatic Approaches
Indonesia's special relationship with Vietnam grows
out of the complex relationship between the two
countries, which has been developing since the mid-
1950s. President Sukarno admired Ho Chi Minh and
was sympathetic to his "dream" of a federation of
Indochinese states, especially in light of Indonesia's
struggle to remove a colonial presence in West Irian
(the Dutch) and in Timor (the Portuguese).
Indonesia allowed consular offices in Jakarta from
both North and South Vietnam as early as 1956. As
Sukarno became more inflamed with the idea of the
"Newly Emerging Forces" battling with "the Old
Established Forces," he permitted Hanoi to raise its
representation to an Embassy in 1964 and allowed the
National Liberation Front (Viet Cong) special repre-
sentation in Jakarta in 1965. The South Vietnamese
Consulate was closed.
Under Soeharto South Vietnam was reinstated with a
"Chamber of Commerce" status in 1967, which con-
tinued until the fall of Saigon in 1975. President
Soeharto's strategy in allowing this unusual potpourri
of representation was presented to his anti-Commu-
nist generals as "keeping an eye on the Communists."
Indonesia tried renewed bilateral gestures with Viet-
nam in 1978, hosting both Foreign Minister Trinh
and Premier Pham Van Dong in Jakarta for separate
visits to continue a "dialogue." In both cases not even
the simplest terms of agreement were reached. Fol-
lowing Vietnam's Treaty of Friendship with the
USSR in 1978, Indonesian Foreign Minister Mochtar
went to Hanoi that November and signed a trade
agreement that was never implemented. Mochtar was
unable, however, to get Hanoi to agree to a meaning-
ful boundary agreement in the South China Sea.F-
Another bilateral sore spot that emerged by 1978 was
the flow of Vietnamese boat people to Indonesian
waters. The refugee influx into Indonesia began as a
trickle in 1975, reached 4,500 in 1978, and by 1979
the number swelled to 48,000. Indonesia initially was
sympathetic to Vietnam's desire to rid itself of ethnic
Chinese and their resented hold over the economy. As
the influx increasingly became ethnic Vietnamese,
Jakarta's attitude changed sharply because of concern
about the burden on ASEAN receiving nations of
caring for the refugees, and the fear of subversion by
the Vietnamese arrivals
Kampuchea, Soeharto was disillusioned about Indo-
nesia's attempts to get involved in Indochinese affairs
Nonetheless, Jakarta pushed ahead with efforts for
friendly but wary relations, including some promises
to Hanoi of future postal and communications agree-
ments, fishing rights, and some hint of giving token
economic aid to Vietnam. Jakarta even held prelimi-
nary discussions with Hanoi about bringing Vietnam
into ASEAN.
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