TRENDS IN INDONESIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A000500020063-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 19, 2016
• Document Release Date: December 30, 2005
• Sequence Number: 63
• Publication Date: April 21, 1960
• Content Type: MF

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CENTRAL I N T E L L I G E N C E A G E N C Y
21 April 1960
MEMORANDUM FOR THE DIRECTOR
SUBJECT: Trends in Indonesia
I. INTRODUCTION
1. Indonesia is in a decline of serious proportions. Its
economy is crumbling; political power is becoming increasingly
polarized between the Army and the Communist Party (PKI); its
people are split deeply on a wide variety of issues; a seemingly
insoluble rebellion is sapping its remaining strength; and popular
discontent, particularly in urban areas, is increasing.
2. Since 1952 there has been a consistent upward trend in
PKI influence and strength. This has been due primarily to the
ineffectiveness and disunity of the non-Communist elements, to
Sukarno's willingness to permit the PKI to prosper by posing as
a nationalistic, pro-Sukarno movement, and to the organizational
MOMEMIMM
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abilities of the P1SI itself. Since 1957, however, this trend has
been offset to a considerable extent by the increasing political
and administrative role played by the Army as a consequence of
its responsibilities under the martial law regulations imposed to
cope with the rebellion in the outer islands and Darul Islam
terrorism on Java.
3. Sukarno has now had nearly a year of complete formal
power as President, Prime Minister, and Supreme Commander.
Thus far he has made no constructive move to utilize his authority
for an attack on the country's problems. He has spent most -if his
time in a fruitless process which he calls "retooling. " Clearly,
this constant reorganization of Indonesia's political bodies and in-
stitutions is, on the one hand, a substitute for decisions and
corrective action, and on the other, manipulation to maintain
his personal position.
4. March was a particularly busy month. When Khrushchev's
two-week visit ended on 1 March, Sukarno had accepted a $250
million seven-year credit, a cultural agreement, and a gift of
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three submarines and a cruiser. On 5 March, Sukarno relieved
the members of Parliament of their functions and on the 27th he
announced the appointment of a new Parliament in which the
Masjumi is virtually excluded and the PKI position strengthened.
Also on the 27th, Sukarno appointed a generally leftist preparatory
committee to organize the National Front, a mass organization to
be led by Sukarno and supported by government money. It is in-
tended as a rival to the political parties.
5. During the month, he also reorganized the staff of his
Central War Administration. Although the Army still appears to
dominate the structure, Nasution was moved from First to Second
Deputy War Administrator. Meanwhile, Sukarno has compounded
the confusion by pressing a reorganization of regional government
which included the appointment of Communists as Deputy Governors
in several regions.
6. On April Foals Day, with public discontent rising and the
economy in chaos, with political parties seeking to form an opposi-
tion bloc, with the reorganization of political institutions still up
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RS~
in the air, and with the lines of conflict between the Army and
the PKI more tightly drawn than ever, Sukarno departed ~jn a
two-month world tour.
II. THE ECONOMY AND PUBLIC DISCONTENT
7. Recently the economic situation has turned from bad
to worse. Consumer goods are in short supply; blackmarketing
and hoarding have increased; and inflation is becoming an in-
creasingly serious problem. The sad state of the economy is
due primarily to mismanagement, neglect, and dislocations
resulting from ultranationalistic, politically motivated moves
such as the seizure if Dutch properties, the mass expulsion _f
Dutch nationals, and the repressive measures against the
economically important Overseas Chinese. The operations of
the RPI rebels and of the Darul Islam terrorists add to the
government's economic problems. They have disrupted com-
munications and normal productive activity. The RPI smuggling
activities and raids on rubber plantations have deprived the
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government of much needed foreign exchange. Military opera-
tions against the various rebel and dissident groups place a
severe strain on the government's budget.
8. The Indonesian people, particularly the Javanese, have
demonstrated a remarkable capacity for passive acceptance of
political chaos and economic decline. The rural population is
cushioned against dire privation by its subsistence ec inorny.
The urban population, which is hit first and hardest by any
economic downturn, is easier f:_;r the police and Ar,,mny to control.
because it is physically concentrated. However, current reports
indicate that there is widespread and increasing public grumLling
and unrest, in rural as well as urban areas, as a result of
economic hardship and the lack of constructive government
countermeasures
9. The Communists are the only ones in a position to
capitalize on this growing public discontent. Through their mass
organizations, they are free to agitate, protest, and demonstrate
and to take advantage of the situation to win adherents to their
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solutions. The Army has the difficult and thankless task of
enforcing the prevailing economic regulations and maintaining
public order. More and more, public discontent is tarnishing
the image of Sukarno. Given continued economic decline and
political disorganization, which appears probable, it is likely
that the time will come when Sukarno's major remaining asset --
his hold in the masses -- will be in peril. In these circumstances,
an erosion of Sukarno's prestige among the Indonesian people
would be an important factor in any decision by the Army or the
PKI to attempt t~ bring about a major political change.
III. LIKELIHOOD OF A COUP
An Army Coup
10. An increasing number of Army leaders appear to be
reaching the conclusion that Sukarno must be deposed in order to
protect army interests and to prevent Indonesia's economic and
political decline from reaching critical proportions. We believe
that Nasution, Acting Prime Minister Djuanda, and most non-
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Communist political party leaders are agreed that the present
serious situation must be retrieved, and that Sukarno's
authority and influence must be eliminated or at least reduced
greatly, before any significant improvement can be made.
Sukarno's absence from the country during the present unsettled
period would seem to provide Nasution and the Army an oppor-
tunity to seize power. The absence of Hatta (due to depart for
a trip to the US on April 29) would also be fortuitous if he were
slated to play an important role in the post-coup government,
His absence would make it easier to clear him of implication
in the coup plot,
11. Army assets for a coup effort include the near monop..;ly
of arms and control of much of the country's administrative
machinery through its functions under the Central War Administra-
tion. The Army would pr :)bably have the support of important
Navy elements, most non-C`omrnunist political leaders, and much
of the civil service.
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12. However, a coup effort would present many problems
and risks. The Army is not a unified organization re-ponsive
to central control. Nasution does not have the back-ng and
loyalty of several important regional and unit commanders.
Nasution and the Army do not have wide popular support.
Sukarno's. hold on the ma-sees is still formidable. The PKI,
with its mass following, Its strong organization, and its influence
in labor and peasant organizations would offer stout opposition.
The Air Force command would almost certainly oppose, but
probably would not be able to prevent significant defections to
the anti-Communist side.
13. Nasution and his followers probably have not yet de-
veloped the necessary plans and organization for an Army coup.
Moreover, Nasution has not demonstrated the determination or
the dynamic characteristics required for such a decisive and
risky move. Furthermore, his position as Chief of Staff is not
secure. Without the leverage of that office he would not be a
major influence in Indonesian affairs. He undoubtedly remembers
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well the October 1952 affair in which he tried a show of force
against Sukarno, failed, and suffered several years of total
eclipse as a result.
14. Nevertheless, there are a number of elements in the
situation which point toward a possible Army move. These
include a virulent press campaign against the installation of
Sukarno's appointed Parliament in which Sukarno personally
is being attacked in an unprecedented manner. It is clear to
informed Indonesians that the press must have Nasution's
support and protection in these attacks. Consequently, Nasution
may find that he has created a situation, wittingly or unwittingly,
in which he will have to make a move to seize power or face
dismissal upon Sukarno's return. Other indications pointing
toward Army action are the continuing efforts of the small
opposition parties banded together as the Democratic League
to attract support among Masjumi, NU, and PNI leaders and
among the people as a whole, and Nasution's recent sudden
calling of a conference of regional commanders.
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15. Although the odds favoring an effort by Nasution to
seize power, either during Sukarno's absence or soon after
his return, have gone up, we believe that the chances of an
Army coup are still less than even. If he does try, and if he
carries most of the Army with him, we believe that he would
have a better than even chance of succeeding.
A PKI Coup
16. For the foreseeable future, a PKI uprising, either
immediately violent or in the form of paralyzing strikes, is
unlikely. The Communist strategy probably is to seek power by
legal and parliamentary means. The PKI is probably the largest
political party in the country and by all odds the best organized
and led. It would have a good chance of playing a major role in
the Indonesian Cabinet in the next year or two as a result of
national elections if they are held, or as a result of playing
upon Sukarno if the elections are postponed.
17. The current Communist strategy appears to be that of
engineering a split between the Army and Sukarno, joining the
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latter to impair the Army's independent power, and then
devouring Sukarno at their leisure. At the same time, they
appear to be follLbwing the equally profitable course of identi-
fying themselves with growing popular discontent, waiting for
the continuing economic decline to erode Sukarno's mass
popularity to the point at which he falls into their hands. The
one event which probably would push there into open revolt in
the near future is an Army move against them serious enough
to threaten their existence; this, however, seems unlikely as
long as Sukarno is in a position to forestall it.
The Effects of the Rebellion
18. The central government's decision to oppose the
rebellion by armed force brought Indonesia's armed forces onto
the center of the stage. The success of the early operations
against the rebels enhanced greatly the prestige of the military,
particularly the Army. The rebellion also provided the occasion
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for proclaiming and maintaining in force the State of War and
Siege decree, the vehicle which has projected the Army into
the political and administrative life ,~f the country. This develop-
ment, coming at a time when Sukarno had lost confidence in the
political party system and when the non-Communist parties
were declining in importance, has tended to counterbalance
the growing strength and influence of the PKI.
19. The rebellion has made it impossible for the Javanese,
who dominate the central government, to impose their will on
the major non-Javanese ethnic groups, and has forced the
central government to make economic and political concessions
to the outer islands. Moreover, the combination of Army and RPI
control on Sumatra and the Celebes has slowed down the expansion
of PKI activity in those areas.
20. The rebellion also split Indonesia's major non-Communist
leaders and forces into two opposing factions. The split is
probably not irreparable, but it would be difficult to overcome.
The PKI has gained as a result of this major split among the
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non-Communists. In addition, the rebellion has increased
Indonesia's economic problems and exacerbated US-Indonesian
relations.
Outlook for the RPI Rebellion
21. Despite the stalemate between the RPI rebels and the
government forces, the rebels retain considerable support and
sympathy among the people of Sumatra and Celebes, and they
have some following on Java. However, the rebels in Sumatra
and North Celebes do not appear to be able to expand significantly
their areas of control. The government forces now committed
against them, about one-third of Djakarta's combat effectives,
can do no more than contain the rebels. The Army does not feel
it can deploy more of its presently available combat strength to
the outer islands because of the terrorist activities of the Darul
Islam and the political strength of the PKI on Java. The central
government is presently organizing about 30 new battalions, some
US-equipped. If all or most of these forces were used for a
major offense against the RPI, the latter might in time be
brought to the point of collapse as a result of attrition and erosion
of morale.
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22. The most satisfactory resolution to the present mili-
tary stalemate would be a negotiated settlement which could
end the unproductive spectacle of Indonesia's major anti-
Communist elements divided and at war with one another.
However, there is little prospect of a negotiated settlement,
at least so long as Sukarno remains in power. Even if Nasution
and the Army were in control, a settlement would be very diffi-
cult, but not impossible to negotiate.
23. The effect on the overall political and economic scene
of a PRI collapse is impossible to estimate with any degree of
precision or certainty. The martial law regulations might be
eased or lifted, thereby reducing the Army's leverage and in-
fluence in Djakarta and its major means of countering PKI
activity. However, given Sukarno's operational technique of
maintaining himself in power by balancing rival factions, and
considering the fact that the PKI and the Army are the only two
remaining major factions, we believe that he would probably not
emasculate the Army as a political force. Moreover, because
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he has taken over as the head of the Central War Administration
which administers the martial law decree, he might decide
that the decree and the administrative structure set up under
it, including use of the Army as the implementing agency, would
be too useful to him to terminate it.
24. If the central government were to fall suddenly under
Communist control, we believe that the Communists would
have a difficult time establishing their supremacy over Java,
let alone the outer islands. If the RPI movement were still in
being it would provide a rallying point for opposition. We believe
that important elements of the military forces, of the Darul
Islam, and many non-Communist political leaders and groups
would join together or cooperate in their anti-Communist efforts.
In this event, these forces could establish control over Sumatra
and the Celebes as a base of operations and, with outside
assistance, might be able to oust the Communist regime in
SIT
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Djakarta. Over the long run, however, the viability of a
separate state of Sumatra and/or Celebes would be highly
uncertain.
FOR THE BOARD OF NATIONAL ESTIMATES:
SHERMAN KENT
Chairman
T
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