CENTRAL INTELLIGENCE AGENCY THE PROSPECTS FOR A UNITED STATES OF INDONESIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A003200030001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 27, 2016
• Document Release Date: August 8, 2013
• Sequence Number: 1
• Publication Date: June 4, 1948
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
S ET
CENTRAL INTELLIGENCE AGENCY
THE PROSPECTS FOR A UNITED STATES
OF INDONESIA
Documen
E0 CHA'AG7_
ACEu
DDA Melt
A r
10.
ictSS.
Anth:
Date:
TS S
Apr 77
763
ORE 26-48
Published on
4 JUNE 1948
This document has been
approved for release throuel
the MUM= !WM PRWITAM of
the Centra ZacKkigance Sgency.
5c.4 I 92d
raP
COPY NO.81
FOR THE ASSISTANT DIRECTOR
FOR REPORTS AND ESTIMATES
-
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
DISSEMINATION NOTICE
1. This copy of this publication is for the information and use of the recipient
designated on the front cover and of individuals under the jurisdiction of the recipient's
office who require the information for the performance of their official duties. Further
dissemination elsewhere in the department to other offices which require the informa-
tion for the performance of official duties may be authorized by the following:
a. Special Assistant to the Secretary of State for Research and Intelligence, for
the Department of State
b. Director of Intelligence, GS, USA, for the Department of the Army
c. Chief, Naval Intelligence, for the Department of the Navy
d. Director of Intelligence, USAF, for the Department of the Air Force
e. Director of Security and Intelligence, AEC, for the Atomic Energy Com-
mission
f. Deputy Director for Intelligence, Joint Staff, for the Joint Staff
g. Assistant Director for Collection and Dissemination, CIA, for any other
Department or Agency
2. This copy may be either retained or destroyed by burning in accordance with
applicable security regulations, or returned to the Central Intelligence Agency by
arrangement with the Office of Collection and Dissemination, CIA.
WARNING
This document' contains information affecting the national
defense of the United States within the meaning of the
Espionage Act, 50 U.S.C., 31 and 32, as amended. Its trans-
mission or the revelation of its contents in any manner to
an unauthorized person is prohibited by law.
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
ORE 26-48
THE PROSPECTS FOR A UNITED STATES OF INDONESIA
SUMMARY
Indonesia is important to the US and to Western Europe as a ,source of raw ma-
terials necessary both to the rehabilitation and development of the economies of those
countries, and to the creation of stockpiles of certain strategic materials. Besides being
the principal Far Eastern source of oil, Indonesia produces 15% of the world's tin and
34% of its natural rubber. Of such a rare but necessary product as cinchona bark,
from which quinine is obtained, it produces 90% of the world's supply. Because of the
need of such strategic materials, loss of Indonesia to Japan in 1942 was keenly felt by
the Allies; and in another war or in preparation for one, utilization of the whole
Indonesian potential would be a valuable asset.
Instability in the area resulting from Dutch-Republican strife has, since the war,
made full exploitation of Indonesian raw materials impossible. Though future fric-
? tion between the two sides may not find expression in as much violence as has been
seen over the past few years, continuation of the underlying disagreements will inter-
fere with the availability of commodities from the productive areas of Java and Sumatra.
Developments in Indonesia for a considerable period in the future will center
? around the formation of the United States of Indonesia (USI) as a federal framework
of government to be established in the territory of the Netherlands Indies, and the
efforts of the Dutch on one side, and of the Indonesian Republic on the other to realize
in the USI the basic objectives which have dictated their policies since the end of
World War II.
Dutch policies and actions will be directed toward the preservation of Dutch in-
fluence in the archipelago and will therefore work toward neutralizing that of the Re-
public by attempting to confine the scope of Republican authority to as small an area
as possible and encircling the Republic in a federation of pro-Dutch states. Republican
policies and actions will be directed toward the replacement of Dutch influence in the
USI and its component states by predominant Republican influence and will therefore
work for the revival of its prestige, the rapid delegation of Dutch powers to Indonesian
governing bodies, the early creation of a sovereign and independent USI, and the
utilization of the federal structure to Republican advantage wherever possible.
The basic conflict between Dutch and Republican aims will involve the entire
archipelago through the efforts of both parties to obtain the support of the popula-
tions and leaders of Indonesian political units outside the Republic.
Prior to the formation of the USI, originally scheduled for 1 January 1949, the
conflict will be perceived in the Dutch terms for the admission of the Republic to a pre-
? Note: The information in this report is as of 27 April 1948.
The intelligence organizations of the Departments of State and of the Navy concur in this
? report; the Intelligence Division, Department of the Army, concurs with those sections relating to
military implications; and the Air Intelligence Division, Air Intelligence Directorate, Department
of the Air Force, had no comment.
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08 : CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
S/PRET
liminary federal organization, in the plebiscites to determine the wishes of the new po-
litical units on the question of joining the Republic or possessing autonomy in the
USI, and in the operation of an interim federal government preparatory to the for-
mation of the USI. After the USI has been established, the conflict will be manifest
in the development of governing organs of the USI and the Netherlands-Indonesian
Union and in the contest for control in those organizations.
The prolongation of the conflict will delay the restoration of political stability
and the rehabilitation of the area's economy, and may enhance the possibility of a
final outcome unfavorable to the interests of the US. The achievement of stability
and economic rehabilitation would best be furthered by the development of the USI
along a middle course, affording expression to Indonesian nationalism but permitting
the continuation of Dutch assistance and guidance in Indonesia. Pursuit of such
a middle course, however, is likely to require the continuing influence of third powers in
the Indonesian problem. Both the Dutch and the Republic, on the other hand, will
continue their efforts to divert third-power influence in the direction of their respective
objectives, the Dutch bringing to bear their position in Europe and the technical ad-
vantages they can offer in developing the Indonesian economy while alleging Com-
munist infiltration in the Republic, and the Republic concentrating on the economic
assets which it may be able to offer to the world.
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78:01617A003200030001-2
a
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
SEler
THE PROSPECTS FOR A UNITED STATES OF INDONESIA
1. THE PROBLEM IN INDONESIA.
The basic problem in the Netherlands Indies is the conflict between the objectives
of the Netherlands and Netherlands Indies governments on the one hand and of the
Indonesian Republic on the other regarding the future political and economic organ-
ization of the archipelago. This problem has dominated all events in Indonesia since
the end of World War II and will continue to be the prime issue even within the frame-
work of the United States of Indonesia (USI) which itself has been advanced as a
solution to that problem. An eventual adjustment of conflicting objectives would
neccessitate great concessions by both parties and is therefore likely to require the
influence of third parties, particularly those now represented on the Good Offices Com-
mittee of the UN Security Council.
The Dutch in working toward their objectives concerning the future political
organization of Indonesia, possess the pre-eminent advantage of the military superiority
of their forces in the area over those of the Indonesian Republic. The considerable
territorial and political gains accruing to the Dutch from their "police action" of
the latter half of 1947 will promote the establishment of the form of the USI principally
along the lines desired by the Dutch. The Republic, faced with this Dutch superiority
during the formation of the USI and in the early stages of its operation, must limit its
efforts to extracting the maximum advantage from whatever structure is established
in order to further the eventual achievement of basic Republican objectives wherever
possible. The interaction of Dutch and Republican efforts to achieve their respective
aims will constitute the core of political developments in Indonesia for a considerable
period in the future.
2. DUTCH OBJECTIVES.
Basic Dutch Objective. The basic Dutch objective is the preservation of Dutch
influence in Indonesia to the degree necessary to maintain Dutch economic advantages
based on the control of the material resources of the area. The principal subsidiary
objectives are: (a) the reduction of Republican nationalist influence, which is directed
against the continuation of the Dutch role in Indonesian affairs; and (b) the encourage-
ment and direction, where necessary, of non-Republican nationalism of a less revolu-
tionary nature.
The achievement of these objectives entails: (a) the creation of a political struc-
ture for all of Indonesia under a government in which Dutch influence can be perpetu-
ated through the transformation of the Netherlands Indies Government into the all-
Indonesian government; (b) the promotion of the participation of non-Republican
Indonesian leaders in that government; (c) the encouragement of the formation of new
states in territories from which Republican control has been eliminated; (d) the en-
circlement of the Republic and the dilution of Republican influence in an alllIndonesian
1
do
,..?:
SET
z
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
S*E ET
government through the numerical preponderance of these new states in such a gov-
ernment; and (e) the creation of a sovereign structure in which the influence of the
Netherlands will always equal, if not surpass, the influence of native nationalism in
Indonesia.
Dutch Concept. The Dutch concept of the future political organization of Indo-
nesia envisages a sovereign, democratic, federal state, the United States of Indonesia,
composed of an as yet undetermined number of units based on geographic and ethnic
divisions in the Netherlands Indies and linked closely with the Kingdom of Nether-
lands in a Netherlands-Indonesian Union (NIU) . (For the evolution of the Dutch con-
cept, see Enclosure A, Part I.) In practical terms, the Dutch concept appears to
contemplate the continuation of Dutch influence throughout the area by means of the
transformation of the Netherlands Indies Government into the federal government
of the USI, the elevation of non-Republican Indonesians to high office in the USI
and the NIU, the membership of new, relatively pro-Dutch states in the USI in sufficient
numbers to counterbalance the effects of Republican participation, and the integra-
tion of the USI into the NIU under the King of the Netherlands. Although Dutch
proposals regarding the NIU do not give the impression that a super-state is contem-
plated, as the USI develops there may arise a tendency on the part of the Dutch to
reserve to the NIU certain powers and functions, over which the USI, as a sovereign
state, would normally possess full jurisdiction, and, in other ways, to subordinate the
USI to a superior sovereignty, that of the NIU.
3. REPUBLICAN OBJECTIVES.
Basic Republican Objective. The basic Republican objective is the achievement
of preponderant influence, if not control, over the Indonesian archipelago by serving
as the focus and principal champion of the powerful forces of Indonesian nationalism
which received such impetus during and after World War II. The concrete manifesta-
tion of this objective is seen in the parallel objective of creating a unitary state in
Indonesia, based upon a common Indonesian nationalism, in which the Republic, by
virtue of its vigorous defense of Indonesian national aspirations, wouid assume the
position of leadership. The principal subsidiary objective is therefore the reduction
and eventual elimination of Dutch influence in the area and the encouragement of
anti-Dutch nationalism, paralleling that of the Republic, in politically less developed
areas which are at present organized into relatively pro-Dutch gtates. The achieve-
ment of the objective of a unitary state in Indonesia is impossible for the present in view
of the superiority of Dutch military power and the consequent force given to the Dutch
objective of a federal structure for the area. The Republic must therefore seek to
utilize the federal structure to its own advantage where possible in order to replace
Dutch influence with Republican leadership as a step toward the eventual goal of
complete independence and the predominance of Republican influence in Indonesia.
At present, the Republic is in a position far less favorable to the attainment of
its objectives than that of July 1947 before the Dutch "police action." Consequently
the attainment of Republican goals first requires a revival of its former prestige through
,.z tSE ET 2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
SE.
the stimulation of pro-Republican expressions of public opinion in possible plebiscites
under the UN Good Offices Committee and in influencing the selection and activities of
members of the Constituent Assembly which will draft the constitution of the USI.
The achievement of Republican objectives also requires: (a) the perpetuation of
the identity of the Republic and its attributes of sovereignty, independent control of
military and foreign affairs, until the formation of the USI; (b) the vigorous advocacy
of a rapid and early transfer of powers from the Netherlands Indies Government to
the federal organs of the USI; (c) the promotion of Indonesian national self-con-
sciousness throughout the archipelago, accompanied by the encouragement of the pur-
suit of parallel policies vis-a-vis the Dutch on the part of the Republic, East Indonesia,
and whatever other nationalist groups can be won over; (d) the utilization, of Re-
publican political skill and experience to offset the Republic's possible numerical dis-
advantage in the governmental bodies of the USI; and (e) resistance against the de-
velopment of the NIU into an international entity possessing a reality and a sovereignty
superior to that of the USI.
Republican Concept. The Republican concept of the future political organization
of Indonesia envisages a sovereign, democratic, and independent republic on a federal
basis, the United States of Indonesia, linked loosely with the Netherlands in a Nether-
lands-Indonesian Union. (For the evolution of the Republican concept, see Enclosure
A, Part II.) In practical terms, the Republican concept appears to contemplate the
restoration of Republican prestige to the level held at the time of the Linggadjati
Agreement * by a successful defense of Indonesian nationalism prior to the formation
of the USI, the encouragement of close ties with the non-Republican governments
in the archipelago, and the adoption of the role, prior to and in the USI, of chief advocate
of Indonesian independence.
4. PRESENT NEGOTIATIONS AND THE USI.
Principal Problems in Negotiations. The principal problems in the immediate
future will be the reconciliation of Dutch and Republican positions in present negotia-
tions regarding: (a) the status of the Republic and the scope of its authority; (b) the
conditions for the Republic's admission to an interim federal organization prior to
the formation of the USI; and (c) the forms and areas of jurisdiction of the USI and
the NIU, their interrelationship and their relations with their component states, the
Kingdom of the Netherlands and the states of the USI.
Dutch Position. The Dutch have set as a precondition for Republican admission
to an interim federal government the Republic's acceptance of the status of a state
in the interim government and the USI, implying Republican abdication of any pre-
tensions to a sovereignty separate from that of the interim government. The Dutch
will seek in the present negotiations to obtain Republican acknowledgment of such
a status and to settle procedures for the dissolution of present Republican attributes
of sovereignty such as an independent army, independent foreign representation, and
3
STAT
S __ET
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
S Et T
independent financial and economic arrangements affecting the general economic life
of Indonesia.
Republican Position. By accepting the "Six Principles" of the UN Good Offices
Committee for the settlement of the basic political disagreement, which were embodied
in the Renville Agreement *, the Republic accepted the status of a state in the USI.
The Republic, however, desires to obtain in the negotiations certain firm commitments
from the Dutch regarding the forms and relationships of the USI and the NIU before
the Republic abdicates its bargaining position by surrendering its sovereignty and
dissolving its independent army and foreign representation. Furthermore, the Re-
public would prefer to surrender its sovereignty directly to a sovereign USI rather than
to an interim federal organization over which the Netherlands would exercise interim
sovereignty. The latter step would imply a surrender' of Republican sovereignty to
the Netherlands and would gravely jeopardize the position of any Republican govern-
ment which consented to such a capitulation. The Republic, moreover, believes that
the scope of its authority as a state in the USI should include Sumatra, Java, and
Madura because, in the Republic's view, the states which have arisen in Dutch-oc-
cupied areas of those three islands, are undemocratic in origin, based on Dutch military
occupation and in complete disregard of the real desires of the local populations. The
Republic will therefore make every effort to prove during and after the negotiations
that the people of the new states desire to be a part of the Republic.
Possible Results of Negotiations. The negotiations are delicate and complex, with
each party seeking to reduce the bargaining position of the other. The diametrical
opposition of the positions of the two parties has resulted in slow progress, at times
approaching a stalemate. If a complete deadlock is reached in the political discussions,
the UN Good Offices Committee will probably urge the Dutch delegation to make one
last effort to end the impasse by presenting its final terms on the form of the USI
and the NIU, on the conditions for Republican admission into an interim federal
government, and on the position of Republican representatives in such a government.
The Good Offices Committee would make every effort to ensure that these final Dutch
terms would be generous so as to facilitate Republican acceptance. Republican re-
jection of these terms might very readily result in the complete rupture of negotiations,
the withdrawal of the Good Offices Committee from Indonesia, and the reversion of the
problem to the Security Council. Such a development would imply the abrogation
of the Renville Agreement and its provisions, those which favor the Republic as well
as those which favor the Dutch. In this case, it is conceivable that the Dutch would
then regard the present organization comprising non-Republican states as an interim
federal government; the question of Republican admission to it would be decided in
large part by the capability of the Republic to stand alone, apart from the rest of the
archipelago. The remainder of this study is based on the assumption that a break-
down of negotiations will be averted, and that an interim federal government will be
formed, prior to the establishment of the USI, in which the Republic will participate.
SEIET
4
STAT
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08 : CIA-RDP78-01617A003200030001-2
SE
5:D: THE INTERIM FEDERAL GOVERNMENT.
The' interim_ federal., government will precede the establishment of the USI and
is intended to serVe as the government of the archipelago, under Netherlands sover-
eignty, unaer which problems could be Worked out which relate to (a) the organiza-
tion of the USI and the drafting of its constitution by a Constituent Assembly and (b)
the transfer of sovereignty from the Netherlands to the USI, if agreement has not al-
ready been reached between the Dutch and the Republic.
The Republic and the Interim Government. If the Republic joins the interim
federal government, it will devote its efforts to demonstrating its appeal to the popu-
lations of the states established in former Republican areas, and will work (a) to
reduce Dutch influence in the interim government and (b) to expedite the early forma-
tion of the USI.
At the same time, the Republic will also press for greater states' rights and will
coordinate this campaign with other states represented in the interim government, ?
such as East Indonesia. Every emphasis will be placed on the formation of the USI
by the original target date of 1 January 1949; any tendency by the Dutch to delay this
step will be denounced by the Republic as an act of bad faith and might become the
subject of a Republican protest to the UN Security Council.
The Dutch and the Interim Government. The Republic's activities in the interim
government will be opposed by the Dutch who are now in a much stronger position
relative to the Republic than ever before. Dutch policy will be directed toward
neutralizing Republican influence in the archipelago by attempting to confine the Re-
public's territory to Java, if not to Central Java, while promoting the influence in the
interim government of leaders and states more amenable to Dutch desires. The forma-
tion of the USI may be delayed beyond the target date until the relatively pro-Dutch
states develop the capacity to balance the Republic, if not to neutralize it, in the
councils of the USI. Dutch officials have already stated that the completion of the .
structure of the USI by democratic processes may easily require a longer period of time
than previously estimated. They have also indicated that firm agreement would have
to be reached regarding the form of the bond between the Netherlands and the USI,
i.e., the NIU,-before sovereignty could be transferred to the USI. A definite effort will
be made by the Dutch to reinforce the structure of the NIU if the Republic appears po-
tentially capable of acquiring preponderant influence in the USI and thus drawing it
away from the Netherlands on a completely independent course of action. The trans-
fer of sovereignty to the USI may Well be delayed until the Dutch are sure that the
NIU possesses adequate safeguards against the loss of the Indies to the Netherlands.
6. THE OPERATION' OF THE USI.
The structural details of the USI have not yet been finally determined. Both the
Dutch and the Republic have put forth their views on its organization but these will
require adjustment and reconciliation, a delicate process which will occupy a sub-
stantial part of the energies of both parties and of the UN Good Offices Committee for
a protracted period to come.,
. Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Dutch Desires. The Dutch, who by virtue of their present military and political
superiority hold the initiative in the organization of the USI, have made relatively few
statements on the structural details of the USI. The Constitution of the , United
States has been mentioned as offering a basis for the development of federal organs,
especially as regards the Executive and the Senate. The US Senate, as a representa-
tive
body whose membership is not based on population distribution, provides a model
for a representative body in the USI in which the overwhelming concentration of popu-
lation in Republican Java could be nullified, thus promoting the relative influence of
minority populations, such as the Chinese, the Eurasians, and the Dutch, and per-
mitting representation equal to crowded Java for sparsely populated areas such as
Borneo. An indication of Dutch intentions to provide representation in the USI for
as many pro-Dutch units and groups as possible has been noted in the Dutch- interpre-
tation of "fair representation" in the Renville Agreement as providing for representa-
tion not only for the new states in the archipelago but also for special districts not
yet organized as states. Equal representation from all political units in Indonesia re-
gardless of their degree of development, as well as from various minority groups, would
further dilute Republican strength in the USI.
The influence of the Netherlands Indies Government would be preserved by the
continuation of the present process of transferring departmental posts to non-Repub-
lican Indonesians. The former Netherlands Indies government departments, and pre-
sumably their personnel, would form the nuclei of the government departments of the
USI, much as proposed in the Dutch notes of May 1947. Dutch personnel on high
levels would gradually withdraw from active operational duties but could be expected
to retain, or seek to retain, advisory responsibilities for a considerable period, especially
in the fields of finance, economics, foreign relations,' and police operations. In these
fields, Dutch advisers would stress the necessity of maintaining the "political and eco-
nomic unity of Indonesia in the world" in order to minimize independent contact be-
tween the Republic and foreign powers with which the Republic had established re-
lations before the "police action" took place. In police and defense matters, Dutch
influence would remain strong through the role of Dutch military personnel acting
as defense and police forces in the interim period and through Dutch contributions of
equipment and training personnel toward the creation of the armed forces and police
of the USI. Dutch technical assistance will be necessary for a long time to come in
assuring the efficient or semi-efficient operation of the valuable economic plant of
the Indies and, as a result, Dutch influence will endure in all economic activity in
Indonesia which is in any way associated with exports and the outside world.
In their working papers recently submitted to the UN Good Offices Committee,
the Dutch have indicated their position that membership in the USI and participation
in its formation should be open to any territory of the Netherlands Indies whose popu-
lation expresses such a desire by democratic processes. The powers of the USI and
of the member states should be so divided that the USI will exercise authority over
matters pertaining to foreign affairs, defense, the main economic and financial prob-
lems, and other matters which can be handled within the sphere of the federation.
SEIZET
?
6
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
??1
The constitution of the member states in the USI should contain no provisions contrary
to the principles of the statutes of the NIU and the USI. The constitution of the USI
should come into operation at the same moment as does the statute of the NIU.
Republican Desires. Republican working papers agree with those of the Dutch
as regards the participation of states in the USI, and the division of powers between
the USI and the member states, except that the Republic urges the enumeration of
powers in which the USI and the member states exercise concurrent jurisdiction and the
acknowledgment that residual powers fall to the states, points not mentioned in the
Dutch papers. The Republic states that the constitutions of the member states should
contain no provisions contrary to the constitution of the USI but makes no mention in
this connection of the statute of the NIU. Further, the Republic believes that the
constitution of the sovereign USI should come into operation prior to the statute of
the NIU so that the USI and the Kingdom of the Netherlands could establish the NIU
as a union of members of equal status. The thus demonstrated equality of the USI
and the Kingdom of the Netherlands in the NIU would be of great importance to the
Republic in opposing the development of the NIU into an indissoluble bond between
the Netherlands and the USI.
? Within the USI the Republic will continue its efforts to reduce Dutch influence
in Indonesia and will oppose any Dutch moves to perpetuate that influence through
the organization of the USI. If Dutch control declines appreciably after the transfer
of sovereignty to the USI, the Republic will return to its original objective of estab-
lishing a unitary state in Indonesia. If Republican influence replaces Dutch control
and becomes paramount in the USI, the campaign for states rights will be abandoned
in favor of "measures strengthening the unity of Indonesia." At the same time
strenuous efforts will be made to reinforce good relations between the Republic and
the more nationalistic states elsewhere in the archipelago. The recent exchange of
recognition between the Republic and East Indonesia and the highly successful East
Indonesian good-will mission to the Republic are steps in the direction of greater co-
hesion between these two states whose effect will be to complicate the perpetuation of
Dutch influence in the area. The Republic may also endeavor to revive its contacts
in an unofficial manner, with sympathetic countries, such as those of the Arab League,
in order to enhance its international position.
Position of Non-Republican Groups. Distributed between the Dutch at one pole
and the Republic at the other in terms of their plans for Indonesia are the various
minorities and non-Republican groups in Indonesia outside the area of the Republic.
Eurasians generally identify themselves with the Dutch and so tend to favor the con-
tinuation of Dutch administration in which they can hold positions of some influence
and social prestige. Chinese, Arab, and Indian commercial groups generally believe
that their economic advantage would be greater under the Dutch where they have
long held middlemen roles than under the Republican economic nationalism. Con-
sequently, these groups also favor the Dutch.
Many members of the native aristocracy in Sumatra, Borneo, and East Indonesia
fear the social revolution inherent in Republican proclamations for the future and
Sye..EPT
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
SE ET
tend to regard Dutch control as necessary to maintain their favored status quo. How-
ever, certain members of the aristocracies, such as the Sultan of Jogjakarta, have
joined the Republic without detriment to their position, and their example may be
used to weaken the adherence to the Dutch by local rulers in other areas. Some rulers,
such as the Sultan of Deli, on Sumatra, will tend to join whichever side offers them the
most in local power. Opportunistically, such figures may join the Republic if it shows
signs of replacing the Dutch as the preponderant influence in the archipelago.
Political leaders among the non-Republican Indonesians in territories occupied
from the Republic are, in most cases, sincere nationalists who desire the eventual
termination of Dutch control, but many of them are doubtful that the Republic offers
the best alternative to Dutch rule and would prefer an Indonesian government with
more moderate leaders than some of those present in Republican ranks. Non-Repub-
lican Indonesian leaders are the mainstay of Dutch plans for the USI and may therefore
be expected to be the chief target of Republican propaganda and conciliatory efforts..
If the Republican government maintains its present moderate cast, if it refrains from
reprisal or threats of reprisal against those who have seen fit to cooperate with the
Dutch, if it appears in the future to be a genuine champion of Indonesian nationalism,
and if, at the same time, Dutch influence in the USI is heavy-handed and perceptible,
many of these key figures may draw closer to the Republic.
Leaders of political groups in Borneo and East Indonesia are generally less po-
litically advanced than the non-Republican leaders of Sumatra, Java, and Madura
and the leaders of the Republic. While they have been led by the Dutch to fear
domination by the Javanese Republic, they might work with the Republic in a loose
and self-interested alliance against the Dutch or play the Republic and the Dutch
against each other for the enhancement of their own influence in the USI and for the
protection of their states from either Dutch or Republican domination. The recent
policy of the East Indonesian Government vis-a-vis the Republic is an illustration of
the former possible course of action. -
Prospects. For the foreseeable future, Indonesia will be the scene of a struggle
between (a) the Dutch aim of creating a federal structure in which its influence can
be perpetuated through friendly Indonesian states in sufficient number to balance
the Republic, and (b) the Republican aim of replacing Dutch influence with its own
in a federal structure which will then evolve into a unitary state. The waging of
this struggle will postpone the restoration of political stability, the rehabilitation of
the area's economy, and the resumption of normal trade.
The failure of the USI to develop into a stable organization and the overwhelming
success of either the Dutch or Republican objectives at the expense of the other within
the framework of the USI would seriously affect the prestige both of the US and of
the UN in the Far East. The virtual elimination of the Republic as a political entity
in the USI and the conversion of the USI into a league of pro-Dutch states would be
regarded by the rest of Asia as a triumph of Western imperialism in which the US and
the UN were implicated through the Good Offices Committee. The emergence of the
Republic as the dominant element in Indonesia and the possible consequent expulsion
SE/ET 8
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003260030001-2
ST
of Dutch influence from the archipelago would represent to the rest of Asia the victory
of local nationalism over Western and foreign domination. These two alternatives
represent the two extremes in possible developments within the USI. The develop-
ment most favorable to the achievement of stability and economic rehabilitation would
be one in which the USI could evolve along a middle way, affording the nationalism
of Indonesia ample expression while avoiding jeopardizing needed Dutch assistance
and guidance.
SE/
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
ENCLOSURE A
The positions of the Netherlands and Netherlands Indies governments on one
hand and of the Republic on the other concerning the future organization of Indonesia
are the result of the evolution of their respective objectives conditioned by the changes
in their respective military and political capabilities.
PART I ? THE EVOLUTION OF THE DUTCH CONCEPT
The Dutch concept is the result of successive revisions of Dutch attitudes toward
the Netherlands Indies under the impact of the war and the subsequent establish-
ment and continued existence of an Indonesian government, the Indonesian Republic,
asserting full independence and exercising authority over a considerable portion of
the archipelago. In the months after the Japanese surrender when the Republic
claimed authority over all the territory of the Netherlands Indies, and Dutch military
strength was virtually nonexistent, Dutch proposals were made to the Republic for
the future organization of the entire archipelago, implying a tacit recognition of the
Republic as spokesman for all of Indonesia. The basic theme of the proposals at
this time appeared to envisage a partnership between the Netherlands and an Indo-
nesia organized either as a unitary state or as a Commonwealth on a more or less
unitary basis in which the Indonesian Republic occupied a foremost position.
The growth of Dutch military power in Indonesia accompanying the reoccupation
of Borneo and the Great East (Celebes, Lesser Sundas, and the Moluccas) brought a
change in the Dutch attitude toward the Republic which was reflected in the nature of
Dutch proposals to the Republic. This change occurred in February and March 1946
after which time Dutch offers increasingly distinguished between Borneo and the
Great East and the Republic; the Dutch proposals of 26 March 1946 offered only to
recognize the Republic as "exercising de facto authority over Java except in places oc-
cupied by allied troops." Other innovations were notable in these proposals in that:
first, the structure proposed for the Netherlands Indies was a federation, rather than
a unitary form, in which the Republic would be but one member state, rather than
spokesman for all Indonesia; second, the implication was conveyed that negotiations
with the Republic would henceforth be for the determination of the status only of
Java, Madura, and possibly Sumatra, while the Dutch proceeded to organize a new
political system for Indonesia, with Republican help, if possible; and, third, the Dutch
reserved the right to develop special relationships with areas choosing to retain closer
ties with the Netherlands apart from the rest of Indonesia. The basic lines laid down
at this time have been developed and intensified in the succeeding two years of negotia-
tions and form the fundamentals of the present Dutch concept of the future organ-
ization of Indonesia, the USI.
In the summer of 1946, the Dutch initiated action on a policy based on their in-
creased military power in the Netherlands Indies of proceeding with the political re-
organization of the rest of Indonesia without awaiting the settlement of the Dutch-
Republican dispute, of creating a federal organization in which the Republic would
11
SE/T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
SEjET
be but one part, and of organizing areas under Dutch control into counterweights to
the Republic within that federal structure. This policy continues in force at present
and its implementation in the past has resulted in: (1) the establishment of several
autonomous administrations outside the Republic in the territory of the Netherlands
Indies; and (2) numerous proposals and attempts toward the unification of these
areas into a federal framework in preparation for the formation of the USI.
The first phase in the implementation of Dutch policy, the establishment of autono-
mous administrations, began early in 1946 and concerned at first only Borneo and
the Great East, areas where the return of Dutch authority had eliminated insubstantial
Republican control. In most of the area local sentiment for the Republic and its
objective of a unitary state for Indonesia had scarcely developed and thus offered little
hindrance to the Dutch program. The Dutch sponsored or encouraged wherever pos-
sible the formation of anti-Republican groups and included their representatives in
local councils formed to assist the Dutch in administering the area. The leaders of
these councils, other native leaders, and hereditary rulers were approached for the
formation of federations for each island, or large area thereof, uniting new native
administrations and those which had survived from the prewar period. These island
federations were then bound together into aggregations large enough to balance the
Republic in any future federal organization. One such grouping, the state of East
Indonesia, was created from the territory of the Great East in December 1946. A
similar grouping for Borneo was obstructed by pro-Republican sentiment in certain
parts of Borneo and in May 1947 only West Borneo could be organized as a state.
Thus, when Dutch "police action" commenced in July 1947, the states of East
Indonesia and West Borneo existed to counterbalance the Republic whenever the USI
provided by the Linggadjati Agreement of March 1947 was established. Shortly
after the "police action" began, the policy of creating autonomous areas was applied
to territory previously recognized as being under Republican de facto authority, but
occupied by the Dutch. Previous attempts to detach Sumatra and West Java from
the Republic had failed until Dutch military occupation of those areas impaired the
potential of the Republic as a deterrent and an alternative to Dutch patterns of organ-
ization for those areas.
Autonomous Areas. The process of creating autonomous areas tends to follow
the same course regardless of the locale of the development ? before 20 July 1947, in
West Borneo and the Great East, and since that date in the remainder of Borneo and
in Dutch-held areas of Sumatra, Java, and Madura. First, there is the re-entry of
Dutch military forces, followed by the re-establishment of Dutch civil administration.
Republican authority, if it was actually present before the Dutch re-entry, is declared
null and void. Local patriotism and ethnic self-consciousness are appealed to and
non-Republican or former Republican leaders are invited to assist in the local ad-
ministration. Contact committees are formed including these leaders, and popular
demonstrations occur at which petitions are presented to the Dutch authorities ex-
pressing the desire of the population to acquire autonomous status within the USI.
The committee of leaders then undergoes a series of metamorphoses in which it is
SE ET
v
12
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08 : CIA-RDP78-01617A003200030001-2
-.?
/
' '-...
M T
transformed first into a preliminary organizing body, then into a provisional council
when the area is given the autonomous status of a daerah istimewa (special district) by
the Netherlands Indian Government, and, finally, into a provisional government when
a basic statute has been drafted and the area is elevated to the status of a negara
(state). A further step occurs as the separate special districts and states within a
large geographic unit, such as Borneo, are integrated into a federation whose borders
are or will be those of the geographic unit. This federation would then be admitted
as a unit to the proposed USI, which in turn would be tied to the Netherlands in- the
Netherlands-Indonesian Union (NIU).
Variations occur in this procedure and occasionally several stages are telescoped.
At the present, starting with Northern Sumatra and proceeding eastward, the archi-
pelago shows varying stages of development within this general program. Northern
Sumatra, or Atjeh, has had a long tradition of opposition to rule by any and all out-
siders and has not yet been organized, although on 5 August 1947, the Netherlands
Indies Government was reported to have declared itself ready to consider requests
from the people of North Sumatra to separate from the Republic. Since 15 March,
the east coast of Sumatra has held the status of a state roughly on a par with East
Indonesia. The west coast of Sumatra has petitioned for the status of special district.
South Sumatra has been mentioned by the Dutch as ready for autonomous status
but definite steps have not yet been taken in this area. West Java has recently become
a state ,of F'asundan under a Republican official as head of State. Since that time,
some preliminary, steps have been taken toward forming a non-Republican adminis-
tration for the Batavia area. Some mention was also made of the possibility of creat-
ing a non-Republican Indonesian regime for Central Java in the Dutch Semarang
sector during the early stages of the Dutch "police action", but little has been heard
of. the project since. In East Java, the preparatory committee was reported to have
been dissolved at the end of January 1948 as a result of popular resistance to the separa-
tion of East Java from the Republic. The formation of autonomous areas in Java
has been greatly complicated by the proximity of the Republic in Central Java and
by the fear of Republican reprisal against Indonesians too closely identified with the
Dutch. On Madura, which had been separated from the Republic on Java by Dutch
salients around Surabaya, fear of Republican reprisal was much less a deterrent; the
island now enjoys an autonomous status and may shortly become a state. On Borneo,
the various native administrations are being integrated into an all-Borneo federation.
East Indonesia has been organized as a state since December 1946 and local ,national
consciousness is inspiring a growing tendency to resist Dutch influence and to draw
closer to the Republic as a fellow-champion of Indonesian national aspirations. If
this tendency increases greatly in the future the unity of East Indonesia may be
broken by the secession of pro-Dutch areas, such as Ambon. Furthermore, the frag-
mentation of East Indonesia into much smaller units may become necessary in order
to "satisfy the desires of peoples to establish a special relationship with the Nether-
lands and the USI" and, as in the case of the Republic, to confine the areas of
resistance to Dutch influence within a circle of more tractable states.
13
SE t4ET
i
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Preliminary Federal Organizations. By December 1947, the development of au-
tonomous areas had reached a point where a start could be made in integrating the
new states and special districts into an all-embracing structure. At that time, leaders
of the various autonomous areas together with non-Republican Indonesians in the
Netherlands Indies Government formed a committee for a United Indonesia to work
for the formation of a federal government for all Indonesia. On 4 January 1948, this
group presented a resolution to high officials of the Netherlands and Netherlands Indies
governments urging the immediate formation of an interim government to prepare
for a sovereign USI. On 13 January, Netherlands Premier Beel announced a program
for the formation of the USI and Lt. Governor-General Van Mook proclaimed a Pro-
visional Federal Council to be constituted as of that date. As was the case with
the metamorphoses of a native committee for organizing an autonomous area, most
of the members of the Committee for a United Indonesia were assigned places in
the Provisional Federal Council and the Committee itself was dissolved. On 9 March,
another metamorphosis occurred and the Provisional Federal Council became the Pro-
visional Federal Government which will continue until the formation of the USI.
The Indonesian Republic has not been ignored during these steps toward the
formation of the USI. The Committee for a United Indonesia invited the Republic to
join in its efforts to form a federal government and high Dutch officials indicated
that the Republic might hold 3 out of a possible 11 posts in the Provisional Federal
Council. While initial Republican reactions to these invitations were negative, after
the signing of the Renville Agreement on 17 January 1948, with its provisions for an
eventual sovereign USI, the Republic announced its willingness to participate in the
interim federal organizations. In desiring to join these organizations, the Republic
at that time was lookin,g ahead to the formation of the USI by 1 January 1949, the
transfer of sovereignty to the USI, and the possibility that, by virtue of its record
as defender of Indonesian nationalism and its experience in practical politics, the
Republic might acquire a preponderant influence in Indonesia through the machinery
of the USI.
PART II? EVOLUTION OF THE REPUBLICAN CONCEPT
After the Japanese surrender in August 1945, the Indonesian Republic, proclaimed
on 17 August, rapidly strengthened its position in Sumatra, Java, and Madura through
taking over existing Japanese administrative machinery and appointed governors for
Borneo and various areas in the Great East. Indonesia was then, on paper, organized
on a unitary basis and nominally, at least, under the Republic. The Republic regarded
itself as the authority for all Indonesia and endeavored to obtain international recog-
nition as the de facto government "of the country." It insisted upon immediate inde-
pendence and rejected as inadequate the Dutch proposals for partnership and inde-
pendence after a transitional period. During negotiations with the Dutch in the spring
of 1946, the Republic's basic assumption was that Indonesia was a fully sovereign
state prepared to enter treaty relations with the Netherlands, and that "Indonesia"
would eventually include the entire archipelago, except for certain areas which might
choose a special relationship with the Netherlands for a fixed period. These views
SEItE7.,T
14
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08 : CIA-RDP78-01617A003200030001-2
4
were reflected in the negotiations before and after the Linggadjati Agreement from
October 1946 to March 1947, and led to the Republican interpretation that Dutch
recognition of the Republic's de facto authority by the Agreement was tantamount
to Dutch recognition of Republican sovereignty. Republican policy concerning the
USI was directed at this time toward the eventual unification of the archipelago, cre-
ating an Indonesian nation rather than a conglomeration of ethnic or geographic
areas. This policy in turn was responsible for the Republican concept of the Interim
Government during the interchange of notes with the Dutch in May, June, and July
1947. The Republic agreed with the Dutch that the Interim Government should be
a forerunner of a federal USI, but differed with the Dutch in maintaining that the
main function of the Interim Government should be to receive the transfer of the
functions of the Netherlands Indies Government to the federal organs and to the
component states of the USI. The Republic further insisted upon one-half the seats
in the Central Council which would control most of the other bodies of the Interim
Government.
By the end of July 1947, and the commencement of Dutch "police action", the
Republic's policy was directed toward the formation of a federal USI of three states
exercising sovereignty over Indonesia and scheduled for complete independence by
1 January 1949. Prior to the formation of the USI, government functions in the Indies
would be carried out by an interim regime in which the Republic would possess at
least one-half of the control and in which the influence of the Netherlands Indies
Government would steadily decline as its powers were transferred to the federal
bodies and to the states comprising the Interim Government. The USI in Republican
plans in July 1947, was less suitable to the Republic's aim of unifying all Indonesia
under its influence than the Commonwealth proposed by Van Mook in February
1946. However, the Republic would be one of three states and could work for the
progressive liquidation of the role of the Netherlands Indies Government in the In-
terim Government and the substitution in its place of a federal organization, in the
governing body of which the Republic might possess preponderant influence.
The effect of the Dutch "police action" and the concomitant creation of autono-
mous areas and inauguration of preliminary forms of federal organization has been
to reduce the position of the Republic from that of one of three states in a proposed
USI to one of a large number of states in a USI already rapidly crystallizing around
and without the Republic. Despite its relatively disadvantageous position in an
eventual federal structure, the Republic must join it to avoid economic strangulation,
political isolation from nationalist elements elsewhere in Indonesia, and defeat in
its aim of eventually securing influence throughout the archipelago.
15 T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
AO.
DISTRIBUTION
The President
Secretary of State
Chief of Staff to Commander in Chief
Secretary of Defense
Secretary of the Army
Secretary of the Navy
Secretary of the Air Force
Executive Secretary, National Security Council
Chairman, National Security Resources Board
Chief of Staff, US Army
Chief of Naval Operations
Chief of Staff, US Air Force
Director of Plans and Operations, General Staff, US Army
Deputy Chief of Naval Operations (Operations)
Director of Plans and Operations, US Air Force
Special Assistant to the Secretary of State, Research and Intelligence
Director of Intelligence, General Staff, US Army
Chief of Naval Intelligence
Director of Intelligence, US Air Force
Secretary, Joint Chiefs of Staff
Secretary, Joint Intelligence Group
Secretary, State-Army-Navy-Air Force Coordinating Committee
Executive Secretary, Military Liaison Committee to the Atomic Energy Commission
Director of Security and Intelligence, Atomic Energy Commission
Chief, Acquisition and Distribution, OICD, Department of State
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2
Q- .
0
U. S. GOVERNMENT PRINTING OFFICE
2583?S?I948
a
Declassified in Part - Sanitized Copy Approved for Release 2013/08/08: CIA-RDP78-01617A003200030001-2