SOEHARTO'S GOVERNMENT RESHUFFLING: IMAGE AND REALITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000400930001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 22, 2016
• Document Release Date: July 12, 2010
• Sequence Number: 1
• Publication Date: March 29, 1983
• Content Type: MEMO

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T
Central Intelligence Agency
Washington, D. C. 20505
DIRECTORATE OF INTELLIGENGE
29 March 1983
Soeharto's Government Reshuffling: Image and Real it
Summary
President Soeharto's swift move to appoint a new cabinet on
16 March following his reelection to a fourth five year term
suggests an image of dynamism, but we believe the sweeping
personnel changes primarily are intended to strengthen
administrative performance and eliminate potential rivals. 25X1
Soeharto's handpicked cabinet and recent changes in the
military hierarchy suggest to us no intent to groom a successor,
and no major departure from the military-technocratic structure
he has used to govern Indonesia since coming to power nearly two
decades ago. He has taken this opportunity to shunt aside his
strongest potential challenger, Defense Minister.Jusuf, and to
appoint only proven loyalists to key positions. In our judgment,
the changes in the top levels of government do not presage
drastic political or economic policy shifts. 25X1
Continuity over Change
The new appointments reaffirm Soeharto's absolute dominance
of Indonesian political life, according to most observers.
Besides loyalty, the key characteristic of major appointees is
their lack of independent power bases. Soeharto's earlier choice
of the obscure retired General Umar Wirahadikusumah to replace
the well-known Adam Malik as vice president reflects his lack of
concern over the impression of the increasing Javanization and
militarization of his government. Although some of the changes
suggest responsiveness to public opinion, Soeharto continues to
deny the opposition parties any effective political voice and has
made no significant concessions to the Muslims. 25X1
Southeast Asia Division, Office of East Asian
Analysis. Coordinated with the National Intelligence Council. 25X1
Comments and queries are welcome and may be directed to Chief,
Southeast Asia Division, OEAA 25X1
EA M-83-10059
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Although larger than the last cabinet, the new one is more
heavily packed with Javanese from Soeharto's home region, and
continues the strong military grip on key portfolios. Soeharto
made some cosmetic changes to placate critics by removing or
reassigning several controversial ministers and poor performers
while promoting others with marginally better reputations for
effectiveness. Former Education Minister Daoed Joesoef was
widely disliked, especially by students and Islamic leaders, for
Similarl
was moved into a less
sensitive cabinet post. His replacement, Munawir Syadzali, while
not a religious leader, does have more acceptable Islamic
credentials.
Some of Soeharto's long-standing key advisers have left the
cabinet, namely Information Minister Moertopo and chief economics
adviser Widjojo. Although their future roles are unclear, they
may continue as unofficial advisers to the President. Others who
have left the cabinet, such as ineffective Coordinating Minister
for Politics and Security Panggabean, and former Interior
Minister Amir Machmud, who left in October 1982, are old Soeharto
comrades who moved to less demanding jobs.
Although reports of political infighting within Soeharto's
entourage were widespread in Jakarta before the cabinet
announcement, in our judgment the struggles reflected personal
rivalries as much as policy differences. The current financial
squeeze will, in our judgment, force further economic
retrenchment which could have a major impact on the domestic
political situation, but Soeharto's cabinet choices give little
hint as to how he will deal with the problems.
The Military
Within the military, Soeharto shunted aside his strongest
potential challenger by downgrading former Defense Minister and
Armed Forces Commander Jusuf.
Jusuf's honesty and concern for the
lower ranks had gained him great popularity both within the armed
forces and among Indonesia's masses. By dividing Jusuf's dual
role between two individuals, new Defense-Security Minister
General Poniman and Armed Forces Commander Murdani, Soeharto in
our judgment achieves several goals. He prevents too great a
concentration of power in the hands of a single individual; and
he can open active military commands to younger officers while
assuring that his retired loyalists retain power by assigning
them to policymaking positions in the Defense Ministry.
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General Murdani, who has risen through the intelligence
bureaucracy rather than through the ranks of field commanders,
has become even more powerful than he was as military
intelligence chief. He remains the country's top military
intelligence chief, and since the cabinet reshuffle he has been
named to head Kopkamtib--the Security Command--in a major
reorganization of the security apparatus. All told, in addition
to his new army command, he now holds seven intelligence posts.
Whether he will retain these after restructuring of the security
apparatus is completed is not yet clear but it would be
unprecedented if he did. In any case, Murdani is now in a
position to place his own adherents in even more influential
positions. While Murdani's Catholic religion effectively rules
him out as a contender for the presidency, in our judgment, he
could be a major influence in determining a successor to
Murdani had criticized Jusuf's military modernization
program, claiming that Indonesia's armed forces needed better
leadership and training rather than large-scale purchases of
modern weapons. What the new military leadership will do about
Jusuf's equipment acquisition program remains to be seen, but we
would not rule out some cutbacks because of the financial squeeze
Shifts in the Civilian Ministries
Outside the formal military hierarchy, the major development
is the further rise of Minister of State and State Secretary
Sudharmono as the undisputed strong man of the cabinet, and the
apparent political demise of his chief rival former Minister of
Information Ali Moertopo and his CSIS (Center for Strategic and
International Studies) faction. Sudharmono's influence has grown
steadily over the years, and personnel changes within the past
several months, capped by the cabinet announcement, effectively
remove his strongest adversaries. His preeminent role had been
signaled in 1980 when Kepres 10 (Presidential Directive 10) gave
him authority to approve all government purchases in excess of
$750,000, thus effectively granting him control over all major
foreign and domestic investment contracts. He has used this 25X1
th
it
au
or
y to dispense and withhold financial favors.
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Sudharmono was successf
l i
u
n
placing proteges and colleagues in the new appointments. The
reappointment of Justice Minister Ali Said and Attorney General
Ismail Saleh strengthens his hand in the judiciary. Advancement
of two other allies, former University of Indonesia rector
Nugroho to Education Minister and Cabinet Secretary Moerdiono to
Junior Minister, also increases Sudharmono's influence. Even
though Soeharto is the final arbiter of all cabinet decisions
and, in our judgment, Sudharmono's role is only advisory, the
appointment of so man Sudharmono associates enhances his
authority. 25X1
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Along with Armed Forces Commander Murdani, Sudharmono is now
one of the two most powerful figures in Indonesia aside from
Soeharto. We believe Sudharmono is currently in the strongest
position eventually to succeed Soeharto although we see no signs
that Soeharto is grooming him as a successor. Despite his lack
of an organized power base within the military, his prospects are
helped by his credentials of being a Muslim Javanese general and
a member of the revolutionary Generation of 1945.
Ali Moertopo and the CSIS Connection
The departure of longtime Soeharto loyalist Ali Moertopo
from the Cabinet, along with two of his adherents- former
Minister of Industry Soehoed and the former 25X6
Minister of Education Daoed Joesoef, visibly distances the
Soeharto regime from the influential CSIC. This think tank,
founded by Ali Moertopo and dominated by Chinese Catholics, is
strongly resented by groups as varied as the Muslim community,
the technocrats, and many high-ranking military officers, for its
influence on the Soeharto government. :Many factors contributed
to Moertopo's removal from the Cabinet, probably including his
poor health as well as the many enemies he has made over the
years because of his penchant for political machination and
controversy. 25X1
Nonetheless, we believe Moertopo will still exercise some
influence with Soeharto via access to the President. Moreover,
CSIS offers the Soeharto government better access to foreign
government officials and international academic circles than any
other think tank currently operating in Jakarta. It also has a
stronger group of disciplined intellectuals willing to provide
Soeharto more sophisticated analyses of foreign and domestic
political issues.
The Technocrats and Economics Ministries
The departure of Widjojo Nitisastro--Soeharto's chief
economic adviser since the start of the "New Order" government in
the mid-1960s--in our judgment does not mean a radical shift in
economic policy. His like-minded colleagues, former Finance
Minister Ali Wardhana and former Deputy Chairman Sumarlin, of the
Development Planning Council have stepped into his two positions
and other well-known technocrats associated with Widjojo have
moved up. As a team, we believe the group should be able to work
effectively together as in the past and with Sudharmono as
well. Indeed, despite Widjojo's standing as the acknowledged
intellectual leader of the technocrats, 25X6
his successors in our judgment are 25X6
likely to turn in stronger performances. 25X1
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Widjojo's departure may help to strengthen the rival faction
headed by Minister of Research and Technology Habibie, who
retained his position. Allied with Habibie is former Director
General of the Chemical Industry Hartarto, who has moved up to
the Ministry of Industry. He has been associated with the
massive petrochemical projects planned for the next few years,
and is likely to support Habibie's technology-oriented approach
to economic development with less concern for fiscal constraints
than the finance-oriented technocrats. Although some
bureaucratic conflicts will be unavoidable, the financial strains
we expect in the next few years probably will strengthen the
overall policy role of the technocrats. Nonetheless, if they
fail to avoid financial hardships, the technocrats will face
strong criticism both from Habibie and his allies and from
opposition groups favoring a more populist approach to
A
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ment
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o
A third group of senior government officials, those
connected with other major development projects, remains firmly
entrenched within the bureaucracy, suggesting little chance for
reform of the country's rigid, confusing, and discouraging
foreign investment regulations. The establishment of a separate
Ministry of Forestry and the appointment of former Director
General Soejarwo as Minister increases the autonomy of the
forestry industry within the bureaucracy -- a sector in which the
army has a large financial stake. The Ministry of Communications
is now smaller than before and is likely to be dominated even
more than in the past by airline and shipping interests. The
appointment of Sudharmono protege Ginandjar to the new position
of Junior Minister for Domestic Product Promotion will help
assure that government projects benefit local businesses. The
economic interests of the Soeharto family are expected to be
protected by the reappointment of Bustanil Arifin as Cooperative
Affairs Minister
l
, as we
l as the new appointments of Radius
Prawiro and Soejarwo, both of whom are well known for their
clo
t
s
o the First Family, particularly Madame Soeharto.
What the Changes Mean For..
..Internal Security- Maintenance of internal security
remains a primary focus of the new cabinet. Deteriorating
economic conditions have heightened Jakarta's apprehensions that
civil disturbances could occur, particularly if the government
has to implement more stringent austerity measures than those'
already in place. Appointment of a number of loyalists with
hardline reputations reflect this concern. Admiral Sudomo --
former head of internal security -- is now Minister of Manpower
responsible for controlling organized labor, which has been
increasingly restless over the past year as a result of growing
unemployment and a wage squeeze. He has dealt closely, and at
times forcefully, with the Indonesian labor federation.
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Similarly, General Nugroho Notosusanto -- former rector of the
University of Indonesia credited with containing the student
situation there -- is the new Minister of Education and
Culture. He is expected to work closely with the military to
maintain tight control over campus activity. The new Minister of
Home Affairs, Soepardjo Rustam, is reputed to be a hardline anti-
Communist who is likely to deal vigorously with internal
dissent.
...Foreign e ations- Reappointment of Foreign Minister
Mochtar suggests Jakarta will continue Soeharto's personal
commitment to an officially nonaligned but quietly pro-West
foreign policy. Although Jakarta's attitude toward Hanoi may
continue to be more flexible than its ASEAN partners, nothing
suggests that Indonesia will end its commitment to ASEAN
solidarity on the Kampuchean issue. Soeharto's recent decision
to defer once again resuming diplomatic relations with China
reflects both his own attitude and the continuing hardline
approach of the military on this issue.
We believe the cabinet and military changes foreshadow no
major shift toward the United States, although Indonesia's
financial strains probably will produce some increase in
frictions with Washington during the next few years. Defense
Minister Poniman is reportedly very friendly toward US
officials. Retention of most of the US-trained technocrats, and
promotion of Arifin Siregar to Governor of Bank of Indonesia
probably will help the relationship with the United States.
Nonetheless, the strong nationalism of President Soeharto
and key officials such as Sudharmono and Murdani could dampen
Jakarta's enthusiasm for closer ties, particularly if financial
strains lead to a perception that Washington is indifferent to
Indonesia's needs.
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Key Cabinet and Government Appointments
Coordinating Minister for Economics,
Finance, & Industry
Coordinating Minister for Political
Affairs & Security
Coordinating Minister for Social Welfare
Minister of Agriculture
Minister of Communications
Minister of Cooperatives
Minister of Defense & Security
Minister of Education & Culture
Minister of Finance
Minister of Foreign Affairs
Minister of Home Affairs
Minister of Industry
Minister of Information
Minister of Justice
Minister of Manpower
Minister of Religion
Minister of State for Research &
Technology
Prof. Dr. Ali Wardhana
Gen. Surono Reksodimedjo
Alamsjah Ratu Prawiranegara
Achmad Affandi
Air Marshall Roesmin
Maj. Gen. Bustanil Arifin
Gen. Poniman
Gen. Prof. Drs. Nugroho Notosusanto
Drs. Radius Prawiro
Prof. Dr. Mochtar Kusumaatmadja
Soepardjo Roestam
H art arto
Harmoko
Maj. Gen. Ali Said
Adm. Sudomo
Munawir Syadzali
Dr. B.J.Habibie
In addition, the following posts have been raised to ministerial rank:
Attorney General
Commander, Armed Forces
Governor, Bank of Indosesia
Ismail Saleh
Lt. Gen. L. Benny Murdani
Arifin M. Siregar
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SUBJECT: Soeharto's Government Reshuffling: Image and Reality
EA M 83-10059
Distribution:
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OEA/SEA/ITB
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Attached Memo sent to Gaston Sigur,&Richard Childress, Old EOB
Frederick Brown, State Dept.
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