INDONESIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00429A001100010019-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: July 31, 2006
• Sequence Number: 19
• Publication Date: January 18, 1963
• Content Type: MEMO

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CENTRAL INTELLIGENCE AGENCY
Office of Current Intelligence
18 January 1963
CURRENT INTELLIGENCE MEMORANDUM
SUBJECT: Indonesia
1. The power relationships which have prevailed
in Indonesia for the last five years are changing.
Since 1957 President Sukarno has retained his pre-
eminent position in great part by maintaining a deli-
cate balance between the anti-Communist army and the
Communist Party (PKI). During this period, the army
has played a strong political role which derived
from a national state of emergency and from its sub-
stantial representation in the cabinet. The Commu-
nist Party is gradually increasing its influence in
the government, but still functions largely outside
the official apparatus and holds no significant post
at the national level.
2. The changes are at the expense of the army.
The army has completed the political task assigned
it by Sukarno --assisting him to implement "guided
democracy"--and improved internal security reduces
the need for martial law. The army?s power has al-
ready been eroded as the result of maneuvers by Su-
karno and the increased influence of Foreign Minis-
ter Subandrio, who, although non-Communist, is strongly
opposed to the political influence of the military.
A further, sharp reduction of army power is probable
by 1 May when the state of emergency is scheduled to
be lifted.
The army now holds two posts in the 14-post
"working" or "inner" cabinet and controls or influ-
ences 16 other positions in the 53-post plenary cab-
inet.
State Dept. review completed
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3. The army's position is being further under-
mined by ambitious non-Communist civilians, partic-
ularly Subandrio, who, together with the Communist
Party, have made the army the whipping boy for Indo-
nesia's deteriorating economic situation. The basic
causes of Indonesia's economic troubles are chronic
underproduction, an export economy dependent on
world market prices, and rash expenditures for a mas-
sive arms build-up. Aggravating these factors are
poor internal distribution, and an appalling lack of
mid-echelon officials who are trained and experienced.
The army is vulnerable to criticism because of the
wide powers it exercised from the national through
the village levels under the state of emergency. The
army also holds directorships of large government-
owned import-export firms and of a variety of pro-
duction enterprises. Officers untrained for eco-
nomic posts,have sometimes.proved to be poor adminis-
trators, and some officers and men have yielded to
corruption. The army is already being replaced in
many of these posts by civilian, non-Communist per-
sonnel, most of them equally untrained for such jobs.
4. The Communist Party is making its strongest
bid since independence to acquire positions of re-
sponsibility in the cabinet. Two Communist leaders--
party chairman Aidit and deputy chairman Lukman--have
ministerial status as members of the plenary cabinet,
but they hold no portfolios, and the plenary cabinet
meets infrequently.
5. The Communists want the posts of agriculture
labor, and social affairs.
6. The intensity of the Communist bid for rep-
resentation appears to result not only from the fact
the party feels its chances are better than they have
been at any time since independence but also from a
shift in power relationships within the party itself.
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7. In pressing the party's campaign, Aidit has
mentioned at least three t'imesduring the past month
the possible abandonment of the "peaceful road to so-
cialism." These references appear largely calculated
to play on Sukarno's preoccupation with national unity
rather than to indicate the party's intentions. The
PKI seems unlikely either to resort to civil war in
the near future or to take action which would provoke
the army into repressive measures. However, probing
activities, such as demonstrations and strikes, in-
tended to test the tolerance of Sukarno and the army,
may increase.
8. The party's claim of 2,000,000 members is
probably valid, and the PKI is easily the best organ-
ized and most vigorous party in Indonesia. No elec-
tions have been held since the incomplete regional
elections of 1957; at that time the PKI had the larg-
est electoral following in Java--7,000,000--and it
polled another 1,000,000 votes in Sumatra. Its ma-
jor strength is in East and Central Java and in the
plantation and oil-producing areas of Sumatra. For
several years, the PKI has been working to increase
its following in the outer islands, and is believed
to have had some success. Java, however, with its
high population density--accounting for 65 percent
of Indonesia's inhabitants, will remain the princi-
pal area of Communist activity. Sukarno's main popu-
lar base--the people of Java--coincides with that of
the PKI, and neither he nor the party is likely to
challenge the other openly in the near future.
9. Sukarno's precise intentions as regards the
cabinet remain obscure. He has repeatedly said that
he prefers a cabinet reflecting "nasakom"--a word he
coined to denote the fusion of nationalist, religious,
and Communist forces in Indonesia. The army and the
civilian leaders who have supported the army (for ex-
ample, First Minister Djuanda) have hitherto influ-
enced Sukarno against appointing Communists to the cab-
inet. The influence of these anti-Communists, however,
is now reduced.
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10.
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Foreign Minister'
u an rio told the American ambassador on 12 Janu-
ary that the maximum gesture Sukarno was likely to
make toward the PKI "at this time" would be the in-
clusion of "some fellow traveler." Sukarno's deci-
sion will be based on his assessment of power reali-
ties in Indonesia and of his personal need for the
respective support of the army, the PKI, and the
various non-Communist civilians whose orientation
toward the army varies from strong support to bitter
opposition. He presumably will also weigh the im-
pact that Communist inclusion in the cabinet might
have on US economic assistance to Indonesia.
11. Sukarno may believe that a policy of ter-
ritorialaggrandizement. will permit him to cope suc-
cessfully with domestic power problems and to divert
the nation generally from its economic difficulties.
Such a policy appears already to be underway under
the guise of a "decolonialization" campaigns aimed
at Portuguese Timor and opposition to colonialism
and "neocolonialism" in British Borneo. By this
means, Sukarno may feel that he can channel the en-
ergies and interests of the army and the PKI in the
same direction, maintain their support of him per-
sonally, and preserve national unity.:
12. Although Indonesia has repeatedly disclaimed
territorial ambitions, Indonesian officials constantly
reiterate, that Indonesia endorses and supports the
struggle of the northern Borneo people, that the north-
ern Borneo struggle for freedom is ''the voice of ',the
Indonesian people," that Indonesia is surrounded by
colonialism and neocolonialism, and the Portuguese
colonialism has turned into enslavement. In fact,
Djakarta appears committed to a policy of frustrating
the establishment of the Federation of Malaysia. Its
objective presumably is to support the establishment
of an independent state or states in the area which
eventually would elect to join Indonesia.
13.
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Both Foreign Minister Subandrio and De-
nse minister Nasution have told the American ambas-
sador that Indonesia would extend political support
to an independence movement in British Borneo. They
have stated that if members of such a movement re-
quested military training, Indonesia would provide
it.
15. Indonesia's claim to West New Guinea, as
a former part of Netherlands East Indies, was set-
tled by the Netherlands-Indonesian agreement of last
August. Indonesia failed to win its objective, how-
ever, of acquiring responsibility for the administration
of West New Guinea by the end of 1962. Although the
temporary United Nations administration is scheduled
to end on 1 May, Sukarno continues his efforts to re-
duce this period. His moves are likely to include ap-
peals to the UN by selected Papuans in New Guinea for
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immediate annexation by Indonesia)
I I These
maneuvers are also intended to demonstrate that
the plebiscite stipulated in the Indonesian-Nether-
lands agreement to determine the Papuan attitude
toward union with Indonesia will be unnecessary.
16. The Soviet Union supported Indonesia's
claim to West New Guinea both diplomatically and by
supplying a massive arms build-up which was a major
factor in pressuring the Netherlands, the United
States, and the United Nations to arrange a peace-
ful settlement largely on Indonesia's terms. Months
prior to the West New Guinea settlement Moscow began
broadcasts to Indonesia deploring the proposed Fed-
eration of Malaysia as a "British necolonialist and
feudal Malayan plot," which would be detrimental to
the peoples of Southeast Asia. After the settlement,
the volume of Soviet propaganda to Indonesia increased
and since the Brunei revolt there has been consider-
able material applauding Indonesian support of the
"North Borneo struggle".
18. Soviet arms deliveries to Indonesia increased
steadily during the first half of 1962, and reached a
peak last summer just before the West New Guinea set-
tlement. I
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19. Since then Soviet arms deliveries have
slowed markedly. Late last summer, in fact, the
massive shipments of materiel to Cuba virtually
brought deliveries to Indonesia to a standstill.
Since autumn, periodic deliveries of arms, including
SAM equipment, land armaments, and particularly
naval units, have resumed.
20. Soviet-Indonesian military aid relations
are currently in flux.
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