Showcase State. The Illusion of Indonesia's 'Accelerated Modernisation' 0207128251, 020712826X

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SHDWCASE

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The Illusion of Indonesia's 'Accelerated Modernisation' edited by REX MORTIMER

ANGU5 AND ROBERTSON

•

PUBLISHERS

First pub-Zisked in /973 by ANGUS AND ROBERTSON

(PUBLISHERS) PTY LTD

102 Glover Street, Cremome, Sydney 2 Fisher Street, London

159 Block 2, Boon Kent Road, Singapore P.O. Box 1072, Makati MCC, Rizal, Philippines 107 Elizabeth Street, Melbourne 222 East Terrace, Adelaide 167 Queen Street, Brisbane

©

The Contributors I.973

This book is copyright. Apart from any fair dealing for the purposes of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission. Inquiries should be addressed to the publishers.

National Library of Australia card number and ISBN

hardbound 0 207 12825 1 paperbound 0 207 12826 X Registered in Australia for transmission by post as a book PRINTED IN AUSTRALIA BY

WA"rson FERGUSON AND GO., BRISBANE

Contents

Introduction PART

vii

1

DEVELO PMENT THEORY IN PERSPECTIVE ~

,C}zajltet I : 'Fee Definition of Development Geoffrey R. B. Currey

C'/zapier 2: The Integration Model

of Development." A Critique

Alan Smith PART

1 27

2

THE NATURE OF THE INDONESIAN EXPERIMENT

..-Chapter 8'.° Indonesia : Growth or Development? Rex Mortimer

»

,Chapter 4 : Indonesia Alodewzisatiorzr Ideology and Practice Ken Ward

51

67

Chapter 5: The Indonesian Army: 'Stabilizer and Dynamiter'

Peter Brinton PART

83

3

SOCIAL SGIENCE AND DEVELOPMENT

.;,Chapter 6 : From Ball to Arndt:

756 Liberal Impasse in

Australian Scholarship on Southeast Asia

Rex Mortimer

101

Index

159

Biographical Note on Contributors

164,

.I

Introduction

Over the past five years, the image of Indonesia in the Western

world has been transformed. With the toppling of Sukarno, the bloody destruction of the Communist Party, and the inauguration of a regime under General Suharto proclaiming its dedication to political moderation and economic rationality, the picture that most Australians, along with other Westerners, have of Indonesia is that of a country making rapid and successful strides towards economic development and democracy under the guidance of military and civilian leaders devoted to the arts of peace, national prosperity and responsible government. The recovery of the Indonesian economy especially has been hailed

as little short of miraculous. In Australia these perceptions of Indonesia, long fostered by the conservative governments of Holt, Gorton and McMahon, have apparently been taken over by the Labor Government which took office in December 1972. The new Prime Minister (Mr Whitlam) very quickly declared close relations with Indonesia to be the cornerstone of his foreign policy, for reasons that have not been spelled out in clear terms. The Labor Government has already discovered that it has major disagreements with Suharto's Indonesia on the place that China and North Vietnam should have in the reworking of relation-

ships in East Asia. But it apparently continues to see the Suharto Government as one capable of promoting political stability, social calm and economic progress, and thereby con~ tributing to Australia's security and p r o p erity. It is clear, indeed, that the Australian Government intends to expand economic and military aid to Indonesia, and encourage private investment in that country, in the evident belief that by so doing it is serving the interests both of Indonesians and Australians. This book examines critically the assumption behind Australia's foreign policy that Indonesia is developing favourably with the assistance of Western, including Australian, Introduction | vii

governmental and private finance. Its concern is not with foreign policy as such, although it follows from our analysis that that policy needs to be scrutinised carefully and its premises questioned. Our purpose is rather to challenge the notion that Australians, and others who share their views, can sit back and bask in the changes now taking place in Indonesia in the confident expectation that they bode well both for Indonesians and ourselves. -Ehecause such attitudes have been encouraged by economists and other *social scientists, it is a challenge to the theoretical framework of their approach and the conclusions they have drawn from a study of Indonesian affairs over the last new years. Prejudice and wishful thinking have all too frequently replaced sober analysis in Australian judgments upon events in Asia, and the price paid has been iiEt: especially for those Asians who have been victims of the panic, outrage and violence that have accompanied the venting of our prejudice or the puncturing of our illusions. It is not beyond the realms of possibility that the sowing of illusions about Indonesia today might prompt another outburst oil 'betrayed' expectations tomorrow. Beyond that, however, there is the wider problem of how we see development taking place in the large number of poor countries close to our shores, and how we intervene in their affairs in the name of aiding their development. Like many others, we have observed, most of us as Indonesianists and all of us as people for whom the travails of the Third Vllorld have a special place in our thinking and feeling, that the plans and programs devised by Western governments and agencies for the purported development of the so-called 'underdeveloped' countries have persistently resulted overall in the steady enlargement of the gap in wealth and lifestyle between the rich and poor nations. Even where these programs have brought some gains in economic growth to their rerribients, they have invariably spawned greater inequalities of living standards among the people of those countries, together with the social and political problems that great inequality promotes. YVe believe there are very good reasons for concluding that we are witnessing another experiment of this kind in Indonesia "

at the present time, and that the bland optimism about viii | Showcase Szalfe

Indonesia's future is badly misplaced. In deflating the myths of Indonesian development, therefore, we seek to bring home to Australians and others that the policies being pursued there in the name of development, in which we are heavily involved through our government and company investors, are calculated neither to improve the lot of the Indonesian people nor to promote the kind of stability and progress which presumably lie at the heart of" Mr Whitlam's foreign policy. Like Mr Whitlam, we have considered Indonesia important enough to merit special attention, in our case as an exemplar of the misconceptions about development in the Third \'Vorld. Not that we believe that Indonesia represents either a particular hope or a particular threat so jar as Australia's interests are concerned. But Indonesia is our nearest neighbor, and a country of 120 million people whose fate must have some bearing upon our own. In addition, it is widely cited as the latest example of an c economic miracle' wrought by Western aid and advice. (Some of the earlier examples, such as Pakistan and, more recently, Thailand have rather fallen by the wayside.) For all these reasons, it represents a case of special interest for Australians in examining the merits and deheiencies of the Western-promoted path of development for poor countries. As is the case with all countries termed 'tlnderdevelopcd', Indonesia is beset with grave problems of mass poverty, unemployment, and economic dependence. Orthodox economic theory has prescribed as a remedy for these ills large injections of foreign aid and investment, and the pursuit by the domestic government of 'pragnlatic' policies favouring foreign investors,

ind ustrialisation and large scale technological restructuring. In recent years, in response to the failure of such policies to bring about any redistribution of wealth in favour of the poor countries at the expense of the rich ones, the theory of economic growth has come under attack from a number of directions, and the nature of these revisions is considered in the chapters that follow. The central fallacy of conventional views of development, we argue, lies in their assumption that processes which are assumed to have worked in the affluent countries in the past will do the same job in the poor countries today. Behind this pivotal assumption, with its doubtful rendering of Vifestern experience, lie others-that concentrating on eco-

I

Introduction ix

nomi growth rates is the key to development; that social and political structures, and their cultural underpinnings, respond to rather than interact in a complex way with economic movements, that the relations between rich and poor nations can be regulated to their mutual advantage. The result, however, is not a program that proceeds from an inherent economic logic and lacks social or _political implica-

tions, as the planners too often take for granted. . . . contrary, what is substituted for a penetrating consid elation of the ecology of development for country concerned is . framework built consciously Op unconsciously national characteristics at relevant times of the economically advanced countries where the planning is done.

Not surprisingly, the outcome not uncommonly reinforces the dependence of the weak upon the strong, and promotes a coalescence of interests between Vlfestern agencies, official and private, and those elite groups in the so-called underdeveloped country which already occupy positions of wealth and power and are able to augment these still further by sharing in the spinout from foreign penetration. . Those for whom the benefits of development are ostensibly destined-the great mass of people who are peasants, workers, tradesmen and petty traders--not only have no so in the was' in which the process is directed, but all too often are the victims rather than the beneficiaries of the measures taken in their name. Our submission, then, is that the whole issue of development-what it means and how it might be attained--has to be rethought in the light of many experiences, including the predominantly negative experience of l/Vestern-devised programs, on the one hand, and the all too frequently ignored experiences of countries such as China which have adopted altogether different goals and methods for the transformation of their societies, on the other. The critiques of development theory which have come from a variety of sources need to be drawn upon to stimulate this rethinking, but what is required above all is a more comprehensive study of development experience and a more imaginative and human understanding of what

values ought to be aspired to by any state which claims to be developing. X

I Showcase State

The essays making up this volume, with the exception of the last, were originally delivered at lectures and seminars organised by the Monash University Association of Students. The authors were all known to each other and had exchanged opinions to varying degrees in the past. Nevertheless, the papers were prepared independently, and it came as a considerable surprise to us to find that our contributions shared a close identity of viewpoint and Iitted together naturally to form some kind of a

pattern encompassing the most significant features of contemporary Indonesian society and politics as we appreciate them. It was from this realisation that the idea of the book

emerged, and, while all the papers have been considerably rewritten for publication, the analytic frameworks are very much as they were delivered. In the first part of the book, the general concept of development as it is generally understood, and as it is being applied in Indonesia, is discussed and criticised. Both in their own right, and as contributions in an area where the general literature from a radical standpoint is deficient in Australia, we believe they form a crucial introduction to the more particular case analyses that follow. The second part contains an examination of the economic, social and political policies of the present Indonesian regime, in which we seek to show that, taken together, they form a web the overall effect of which is to perpetuate dependency and intensify underemployment, inequality, injustice and oppression. The nature of the Indonesian elite, and especially its

military component, is given particular attention, for the reason that we consider it to be impossible to estimate the trend of events in Indonesia without taking into account the dispositions and perceived interests of those who wield power. The third part turns the spotlight on ourselves, or rather upon the social scientists upon whom we rely to probe beneath the surface of events and reveal basic tendencies with which to order and refine our opinions. In this essay I argue that Australian researchers on Southeast Asia, and especially Indonesia, have long worked with an ideological concept of the world and social processes which, however it may have been used in the past to contribute to a better understanding of the societies and

cultures surrounding us, always embodied beliefs which today Introduction

| xi

have become a major barrier to further insight into those societies. These beliefs are the fundamental tenets of ideological (as distinct from political) liberalism, and to the extent that

we all share them in one we_y or another, the recognition of their limitations is an indisp enable step along the road to a more profound conception of- tlie relationship that exists between ourselves and the peoples of Indonesia and the entire Third World. We know that many of our colleagues will disagree strongly with our approach, a number of them who have read the manuscript have already made this clear. To those who hold basically differing estimates of trends in Indonesia, there is nothing to say except that we welcome public debate on the

issue. I wish, however, to address a few concluding remarks to the larger number of" critics who hold more ambivalent views about our conclusions, but who argue that it is too early to

come down hard on the Suharto experiment. They say, in effect, that there are Indonesians in public positions of importance who are aware of the deficiencies in present developmental plans and are doing their best to modify' these plans to take greater account of popular welfare; and that strongly adverse criticism from Western circles makes the task of these reformers harder by arousing the antagonism of the Indonesian authorities towards liVestern intellectual opinion generally. The sense of identity and empathy which liberal academics in Australia and elsewhere feel towards the capital-city intellectuals of Indonesia who have been drawn into positions of

government responsibility is readily understandable in the light of their common aliinities and interests, built up over many years of mutual contact and exchange. But, as the analysis that follows makes clear, we do not regard present Indonesian trends as amenable to modification by this or that well-meaning group in advisory circles. A definite structure of interests has been created by the interaction of those whom I have called comprador capitalists in Indonesia and foreign capital, and the policy trajectory of this structure will only alter if it is overthrown from without or as a result of internal divisions, or a combination of both. Sharing the illusions of Indonesian intellectual reformers means in practice acquiescing in the further impoverishrrlent and oppression of the Indonesian people, as

xii | Showcase Stare

well as misleading opinion in our own country. To the extent that the academic forsakes the intellectual function to subject all social and political action to rigorous and fearless analysis according to his judgment and the values he upholds--out of consideration for extraneous loyalties or a desire to 'see the best in things'-he denies his own role and ends up as an_ apologist and disseminator of harmful illusions. He fails those, not least among them his students, towards whom he has an ohliation to keep faith by pursuing his insights to their furthest reaches.

April 1973

REX MORTIMER

Introduction f xiii

PART 1 Development Theory in Perspective llllllllll-

CHAPTER 1

..-...

GEOFFREY R, B. CURREY I

The Definition of Development

The World in Crisis

Poverty and the Crisis in the Poor Countries There are something like 4,000 million people living on the earth today, 3,050 million of whom live in what can be called 'poor:\ countrles.1 For most of these people, crisis

is

Et

daily

experience as they struggle to secure the most fundamental elements necessary for a decent human existence. Solving the crisis of poverty means for them, getting enough food and enough of the right sort of food, having shelter and access to fresh, clean water, access to basic medical care, productive employment and a just share in the fruits of production; access to elementary education; and an effective voice in social and economic decision-making. To the inhabitants of the affluent, industrialised countries,

the aggregate statistical picture of world poverty has an air of remoteness and unreality about it. Most of us simply cannot experience the fact that one out of every two human beings does not get enough of the right sort of food to sustain a healthy, active lit"c, that one in ten of our brothers and sisters are actually starving;2 or that 300 million of the world's children will either die before reaching maturity or will grow up with grossly impaired physical and mental capacity because of protein-deficient diets and the effects of disease associated with malnutrition.3 While we can become furiously involved in the state of our own education system, we remain unmoved by the fact that 810 million of our species are illiterate.'* A rate of unemployment in Australia of over two percent is sufficient to bring down a government, but as a nation, we fiercely resist any attempt to 'subvert' the international economic system that promotes general rates of adult male unemployment in the poor countries of 30% rates that rise as high as 50% for those in the 14-25 years age group? Dejitaition of Development

|1

Every year, this poverty becomes more pervasive and acute. Almost three persons are added to the human population every second. That means that approximately 100 million new mouths must be fed each year, that at the present rate of increase, a 'nation' equal in population to the United States or the Soviet Union is added to the world every two years and, that by the end of the century, world population will be rising by 1,000 million every eight drears." The critical problems presented by this rate of increase are simply not being dealt with. Though world food production as a whole has expanded enormously over the last twenty-five years, and has on the basis of world average consumption just kept ahead of the increase in human

numbers, the position in the poor countries is far more serious. In Latin America and the Middle East, food production is barely keeping pace with population growth, but in Asia and Africa the battle is being lost.7 Great strides have been made in control of epidemic diseases such as malaria, yet there are more sick people in the world than ever before. Leprosy, sleeping sickness, bilharzia and the diseases associated with protein/calorie deficiency and lack of essential vitamins, aa@s at least 200 million people.**

Affluence and the Crisis in the Rick Countries W'hile the spectre of catastrophic famine and plague stalks the inhabitants of the poor countries, we in the rich countries continue to ignore the plight of the majority of the human race. The analogy between this attitude and that prevalent among French or Russian aristocrats prior to the revolutions which

transformed their countries, seems unavoidable. The inhabitants of the rich countries comprise just under one-qu a f t e r of the human race, yet on the average, they consume 3,050 calories per capita per day compared to an average consumption of 2,150 calories per capita per day for inhabitants of poor countries." The rich countries produce more than 80% of the world's gross national product ,lo on the average, inhabitants of rich industrial countries consume more than . ff.y times as much commercial energy as the average person living in the poor countries." A child born in a rich country has between 20 and 4-0 times as great a chance of living to maturity as a child born in a poor country." The rich nations rnonopolise 2

|

DeF,'eIop17wnt Theory

the world supply of doctors and teachers. Yet the rich countries also face a crisis of unprecedented dimensions, a crisis which threatens the continued existence of their civilisation as presently organised. Industrial society is dependent upon the use of certain essential raw materials and fossil fuels, though the world's resources of these are great, they are nonetheless finite, and it has been estimated that their supply will, within a relatively short period, be exhausted unless the prevailing rate of increase in exploitation is halted. Even allowing for a Jive-fold increase in known reserves, economically useable supplies of gold, mercury, silver and zinc will be exhausted within 50 years or less. Within one hundred years, lead, aluminum, manganese, molybdenum, nickel, platinum and associated metals, tin and tungsten, will be used up. Chromium, cobalt and iron will last only a further 200 years. The position with fuels is even more serious, natural gas, petroleum and coal will suffice respectively for 49, 50 and 150 years. Even I massive increase in known reserves would extend estimated use-up times by only an infinitesimal amount, due to the properties peculiar to exponentially increasing rates of exploitation?" Not that any of these materials or fuels are actually 'used up' of course; they are simply transformed in ways not natural to the existing environment and become what we call wastes and pollutants. No-one really knows the capacity of the earth's natural systems to absorb these disruptive emissions. We can document the advance of this disruption, however. For example, we know that lead deposited in the ice-cap of Greenland, far

from any industrial centres, has increased 300 times since 1940, or that DDT is now found in the fatty tissues of all human beings, from Alaskan Eskimos to city-dwellers in New Delhi." Above all, we do know that there are limits beyond which pollution causes natural systems to break down -as seen in dead lakes and poisoned streams and the effects of motor vehicle emissions on photo-chemical smog. The effects of unrestrained industrial growth are already sufficiently noxious to have provoked massive government campaigns to 'clean up' the environment. The US Council on Environmental Quality has called for that country to spend US $105

billion by

1975, simply to

begin improving the De_lenition of DeL'eZo;§ment 3

I

quality of air and water in North America." In October 1972, Congress approved the spending of Us $18,000 million for improvement of the nation's water supply. And in the Soviet Union, the government recently allocated US $4,300 million to clean up industrial discharge from factories and a further us 31,200 million for municipal sewage plants, in an effort to cleanse the Volga and Ural river basins." However, these measures are mainly cosmetic, they do little to attack the root causes of the problem which lie in the nature of existing technology and the 'growth' goals of industrial society. While a

resource-saving and non-polluting technology is conceivable, particularly through use of solar power, winds and tides as energy sources, we are as yet far from developing a workable and economic technology capable o f exploiting these resources and are further still from reconciling those with vested interests in the prevailing system, to such changes. In the long term, only one solution seems feasible, namely the retardation of industrial growth. Yet we may already be beyond the point of no return, the more furiously we act to stabilise one part of the environment, the more we throw some other part of the earth's ecosystem into disequilibrium. Concurrent with its 'physical' problems, industrial society faces a growing challenge, especially from among the young, to the credibility of its goals and values. The young have experienced the dominant system at its worst, as well as at its best, many have found the methods of production which it dictates unattractive and the

rewards it offers, hollow or

repugnant. Furthermore, it has become apparent that this system has not really fulfilled even its promise of atliuence for all. It is plagued by problems associated with simultaneous inflation and unemployment, and substantial minorities remain excluded from the general prosperity. In fact, the inability of the system to equitably spread the costs and benefits of affluence has emerged as one of its principal failings. Thus in the United States the richest country in the world and the most highly industrialised-some 25 million people are living in what is considered by North American standards to be poverty, whilst as many as 10 million are actually suffering malnutrition comparable to that experienced in many poor countries."

4- | Development Theory

'Develo_brent' through Imitation and Integration

of

and with the

Rick Countries

The conventional economist tells the poor countries that they will best and most quickly overcome their problems of mass poverty by imitation of the rich industrial countries, and that this imitation will be facilitated by a close integration of poor countries into an international economic system dominated Br the rich countries. Given the critical problems facing rich and industrialised countries, such advice appears banal and misguided to a degree that almost defies belief. That this is the best the "science" of conventional economics can

suggest, is a reflection omits intellectual bankruptcy and isolation from the real world. That the poor countries must create and expand their productive capacity is obvious. Let nobody be so simple-minded as to assume, just because the affluent nations have long since passed an optimal level of industrial resource-use and transformation, that there is any implication that the poor countries should remain absolutely unindustrialised. But, industrialisation need not necessarily mean copying either the techniques, the forms of social and economic organisation, or the ultimately self-destructive goals and values of contemporary rich countries. Poverty in most poor countries is primarily rural in incidence , therefore industrial solutions must be based in the countryside. They must use the most abundant indigenous resources and that means they must be labor-intensive. And whatever is produced should satisfy local, not imported, foreign needs, and should benefit the majority and not simply a privileged few.

The New Paradigm In nature, all systems tend towards entropy, towards a stable (least energy-using) if dynamic, balance. The activities of man have in historical times disrupted these systems and set in motion disequilibrating forces that have not had time to work themselves out. These disequilibria have become cumulative and reinforcing, with disruptive elTects that are now occurring at something appro aching an exponential rate. This must mean that the activities which give rise to this situation are ultimately self-terminating. Balance will be restored, but it is by no means

certain that the new equilibrium situation will include /zoo Dqyqnition , v Development | 5

sapiens. If mankind is to survive, it has become absolutely essential that we look anew at our relationship with each other as individuals and as groups, and at the place of our species in material and extra- material creation. Solutions for the critical problems facing both poor and rich countries will not be found in the dominant and conventional world view that prevails in the rich industrial countries. "Le must evolve a new paradigm, based on new social goals and values, a paradigm that can accommodate new productive

techniques and new kinds of social relationships. This new world view will show that poor and rich countries are part of the one world, that there is a direct and causal link between the poverty of the former and the affluence of the latter. It will be based upon the right of all peoples to share equally in the use of the planet's resources and upon the need to work in harmony with natural systems, rather than seeking 'mastery' over them. It will restore to the rich countries that which they have lost-a perception of goals and values beyond the purely material. This new paradigm will not arise in the universities of the rich-industrial countries, for these are by their very nature merely final sorting-houses for the socially-programmed, who have already displayed a greater-than-average conformity to the dominant world view. The new paradigm will he worked out in the streets of the cities in the rich countries and in the over~crowded towns and countryside of the poor countries,

The Meaning of Development The Importance of a Dsjinilion Consideration of the definition attached to the word 'development' is of crucial importance in any attempt to assess the likely effectiveness of rival strategies for tackling the problems of the poor countries of the world. This is because the meaning given to the term will determine the range of questions any model of change can ask and the sort of solutions it can of-Ter. The word 'development' is, without doubt, one of the most abused in the language. In both its popular and specialist usages it is employed interchangeably as a description of social goals or 'ends' regarded as desirable, a description of the

strategy or 'means' recommended for achievement of these 6 I Development T}zeor_.v

goals, and as a synonym for the measures used to record progress towards them.

In the most general senses, 'development' implies a process of ' improvement, of becoming.18 . I y definition of the word must answer three broad questions. Firstly, who is development for, who will it benefit and who will have to pay the costs it involves. Secondly, how is development to be effected. And thirdly, what is the nature of the society it is expected will emerge after the process of social change. Existing dehMtions of "development" can be categorised as being of one or" two broad types, each coinciding with a major school of contemporary political and economic thought. The First of these definitions is that of the dominant or conventional school of economics. It concentrates upon answering the question 'how', regards the question 'who' as being outside the proper ambit ofits investigations, and takes the question 'what' as given. The second is associated with a rather less homogeneous group, including both economists and non-economists. These by-and-large agree with the importance given in radical analysis to the question of 'who' is to benefit from social change, but at the same time question the validity of the industrial society of the rich countries as a feasible or desirable goal of social change. It is not possible within the confines of this chapter to discuss at any length or even to mention all the many varieties of argument within each broad school. I will concentrate instead upon trying to isolate the common elements peculiar to each

definition, and whilst this treatment must inevitably tend to caricature both of them, it will enable me to highlight the basic propositions-explicit and implicit assumptions-that divide them. The discussion will be primarily concerned with the conventional approach, partly because this is the dominant

contemporary paradigm in both academic and oliicial circles. I shall then look briefly at rival definitions and conclude with an attempt to formulate a definition of my own.

The Conventions! Eeorzomisfs Dgrinitierz of "Development" The conventional economist claims that his definition of 'development' can be and should be neutral or value-free. It is

this assumption which leads him to reject the question of who Definition

of Development |

7

is to receive the benefits, and who is to pay the costs of development, as irrelevant. But while this question is not specifically considered by conventional analysis, it is usually implied that it is the majority who will benefit from 'development', at least in the long run. This general sharing of" benefits will occur, it is argued, through a process of diffusion which will raise the living standards of even the worst~ofi` sections of society." I would argue that this claim to neutrality is spurious, that 'development' decisions arise by their very nature from a series of value-judgements that integrate individual and collective ideals and aspirations into a social reality. so Failure to recognise "development" as a value-laden concept merely disguises the conventional economist's implicit value-judgements and leads him to dangerous and dishonest evasions regarding the consequences of his prescriptions." It also means that the essentially Political nature of "development" decisions is not highlighted and the questions (such as 'development' for whom?) that form the substance of political debate in the rich countries, are never asked."

The Inter-related .Nature of Economic and Other Social Changes The conventional view tends to assume that all the in»habitants of a poor country have a homogeneous interest in the 'development' process and that aid donors '_. supply needed funds and material share this interest. At die very Tesast it is assumed that political leaders and bureaucrats who execute the process are neutral with regard to its operation.

Development is Pictured as the result of a Partnership between _troliticians who wont to accelerate economic growth, technicians who show them how, and aid doNors." Such a view reflects a highly unreal conception of politics. Different groups within the poor community are certain to have conflicting interests which will determine, to some degree, their attitudes towards what constitutes 'developments and how it might best be achieved." One reason why so little progress has been made in many poor countries in terms of the satisfaction of the needs of most people, is that the sort of politics associated with poverty is of a type least likely to throw up political leaders willing and able to make the social changes necessary to secure

such 8

PIIOgII€SS.25

I Deatelojsmenr Theory

Non-socialist poor countries are frequently dominated by Western-educated, urban elites, who operate imported political institutions in ways which ensure that they remain alien and formal, unrelated to the rural and often illiterate mass, who continue to identify primarily with traditional political values and figures of authority. Such elites work the 'modern' political system for their own benefit and, by excluding the majority from any eHlective share in social decision-making, prevent its being used to satisfy the needs and desires of most. Overt unconcern with economic and political values arises also from the conventional economist's assumption that CCO-° nomi changes can be analysed as if they operated independently from political and other social forces. This attitude in

turn stems from the assumption that homo sapiens is everywhere also homo ecotzomicus, a discrete creature who responds predictably to economic stimulants and gratifications that are common motives of activity in the rich-industrial countries. Thus economic growth is treated as an autonomous as well as a neutral part of the 'development' process."

'Economic Development' o f co Synonym for 'DeoeZo_omont' This assumption leads in turn to 'development fetishism'-a concentration upon eoorzomic 'development' as an objective outside the general field of' social relations-rather than to a consiclcratioii of t i c social organisatioii necessary for its realisa-

tion." Increasing national wealth in relation to population may well be an essential part of 'development' in poor countries.

But pre-occupation with only economic change can be misleading and self-defeating." It is customary for conventional economists to preface their detailed discussions of 'development' with some remarks about

the 'ultimate' or 'basic' goals of economic change, frequently referring to the elimination of mass poverty and gross inequality. These comments obviously reflect value-j udgements about the ideal society, but in fact the treatment of 'development' that follows almost invariably considers economic change in isolation from other social change, and, worse still, tends to use this economic change as a synonym for 'development' itself. so This misleading identity stems from the conventional

treatment of economic growth as a neutral instrument of change Definition

of Development |

9

and from the associated assumption that the means employed to effect social, and particularly economic changes, will not operate to determine the kind of society which change produces. Pre-occupation with economics also interacts with another conventional assumption, namely, that economic goals are always paramount in poor countries. No doubt economic planners from rich

('mmtlrles

feel. that thls jlmufrl he the case,

particularly if they ind the poverty of the Third VVorlcl disturbing or horrifying. But, in fact, man does not live by bread alone, even in the poor countries, and non-economic goals may be of equal or greater importance for the majority of people living in these areas. The masses might also be under» standably sceptical about

ineasurcs

proposed for economic

growth, knowing from experience that such measures have costs as well as benctlts and that these are unlikely to be equitably apportioned. so Because of their narrow ciplinary approach, conventional economists treat political and other non-economic factors as uiirely negative phenomena,

'is

botenti it ha7ard

I

Abandoning the Integration Strategy

Reform o f Radical Change The argument for sweeping reorientation in fact, of course,

demands also radical political reorientation, which may in turn demand radical change in the location and distribution of power. T is not a problem solely or mainly concerning internal power smnasnazaa. poor countries. It is on this

point, the political implications, that observers whom I'll call reformers part company from the radicals. The analysis of someone like Seers, which I've referred to, concludes lamely and uneasily after its radical identification of the nature of the problem. For whatever reasons, having shown the need for redistribution, he does not consider its implications as a political

act. He envisages a new approach to modernisation, but doesn't consider the roots of the current modernisation orientation, the privileged and powerful class which benefits from the approach. Nor does he consider the crucial role of foreign investment

reinforcing elite interest in the modernisation/integration strategy. Further, Seers specifically excludes consideration of implementation of the elements of his strategy through revolution, and limits his consideration of international influence to specific policy measures which encourage capital use and the import of equipment from rich countries. He appeals for enlightened action on the part of rich countries in their trading relations with the poor, couching the appeal in terms of the overall interest of the rich countries in avoiding major political upheaval in the 'Third 'v'Vorld'.35 But is there any way short of major political upheaval by which the necessary changes can be made? What are the political implications including the international ones? If we 44 I

Development Tfzeoay

are serious about the necessity for change, these questions must be taken seriously. Let us consider separately, so far as possible, the complementary actions required to implement the alternative--namely redistribution within, reorientation without.

Political Implications of Redistribution and Roorioatotiorz Redistribution of income might occur through an enlightened act of a government choosing economic reform." It would entail strong action against elite consumption, but also against the elite cultural orientation to the outside world, its desires for integration and participation in the modernity of the rich industrialised society. It would entail too, strong action against the economic relationship between elite and foreign

investment. The same effect could be produced by more abrupt political change--a new leadership acquiring power with mass support or ideologically legitirnised in terms of mass interests. External reorientation could come about through nationalist sentiment being turned against foreign economic inliuence. But this sort of action too seems to itnnlv political action against elite whose crests are served by the relationship with foreign investment. In effect, then, the two aspects of the abandonment of the integration strategy demand a similarly radical ideological basis, simultaneous action on the home and international fronts against the partners in integration-type development. There can be no doubt that, given the current world situation, internal political elements seeking to avoid such measures or to resist

them, can command support from rich capitalist countries,

including, in the end., military assistance and even intervention. This could be interpreted merely as greabpower insistence on the maintenance of the international status quo, avoidance of any change through political upheaval rather than reform. But further insight into rich country attitudes can be obtained from that of the international financial agencies. Their operational assumptions demand perpetuation of the integration strategy, access a foreign private investment, and minimal interference wit operation of the free market system." Their demands are in conflict with both elements required for the abandonment of the integration strategyredistribution and reorientation. Bl.. f

I

The Integration Model 45

The conclusion is inevitable, firstly, from the point of view of internal politics, it is difficult to see how action for redistribution and reorientation could be implemented without radical ideological justification, whatever the class origins of the political driving force. Secondly, it is difficult to see how even moderate or partial reform could be implemented by a country in any way reliant on external assistance, e.g. from the international financial agencies in the.. .case of a foreign exchange crisis. The international agencies virtually demand. as nrerequisite for tbeir cooperation and 'credit rating', acceptance

of an open-market, integration model economy. This in turn leaves the external choice as star nothing. Serious implementation of the required r e f e r . £lt€1;§;E.9.i;€ demands strong anti-elite a c t i o n » . to complete inde. . . ` pendence from the international capitalist world. It is difficult to imagine an ideological reconciliation go such reform with continued compeL M wmmmg her words, implementation of" the necessary reform amounts to a major political ¢*=

upheaval. Rich Country Interests

This raises further issues. Earlier I was at pains to demonstrate the mutually reinforcing nature of poor country elites and foreign investors at the heart of the elite/enclave 'development' pattern. But nothing has been said of the motives of the rich countries in perpetuating their integration with the poor countries. Clearly the relationship is perceived by the rich countries, or significant elements within them, as well as by the international financial agencies, as essential. It becomes

vital to know just what is the nature of the "dependence" of the rich countries OIl the poor. Secondly, it is necessary to examine relations between rich and poor countries generally, not just within the capitalist world. A resources argument for rich country dependence implies a relationship between imperialism and industrialism, rather than capitalism. Thirdly, whether we conclude that it is purely a problem of perceptions, or some more material dependence, change is demanded within the rich capitalist countries if there is to be the sort of change in the poor countries, at present integrated with the rich capitalist

countries, which would accompany any meaningful attack on 46

I Development Theory

the problem of the poverty of most people in the poor countries. Either perceptions in the rich capitalist countries, or their present dependence, must -be changed if the poor countries are 'permitted' radical political changes required toQ their abandonment of the integration strategy. It may be that radical political and economic change in the rich countries is the prerequisite for real development in the Third World. Finally it must be accepted, however painfu e that short of abandonment of" the integration strategy, our efforts to help the poor, no matter how well intended, are essentially meaningless, worse, they are political acts which serve to prolong the Fprocess of underdevelopment, better serving the purposes of relieving us of a burden of guilt than of making a meaningful contribution to the poor of the 'Third World'.

The Integration Jilodel

I

47

PART 2 The Nature of the Indonesian Experiment

CHAPTER 3

-»-

REX MORTIMER

Indonesia: Growth or Development?

William Appleman Williams has aptly dubbed growth the 'Zen Buddhism' of Western ideology-the nonviolent, nondisruptive way to salvation, the equilibrial solution to all social problems.1 In reality, of course, economic growth is neither nonviolent nor

nondisruptive. One has only to think of the violence and social dislocation which accompanied America's classic expansionist phase to appreciate the way in which the warts on the face of 'progress' are often painted over by the ideologists of growth. 2 Nor, as we are coming to realise more clearly with the passing of each ecological milepost on the road to doomsday, does growth offer any assured solution to the problems of late twentieth century man. Whatever else may be said of Western man, he has been free with ideas and prescriptions for salvation, and so we have spread the creed of growth assiduously in the Third World.

Understandably, too, in view of their technological weakness in relation to the in dustrialised states, their difficulty in sustaining and finding -employment for rapidly rising populations and their attraction to the loaubles dangled constantly before their eyes by industrial man, the leaderships and political publics of these countries have frequently embraced the religion of growth and followed us in equating it with development. There is ample evidence, however, that economic growth and development are not synonymous. In the case of Indonesia, we have to look no further than her colonial past to grasp this fact. From about 1850 to 1920, the Dutch East Indies underwent a sustained period of rapid economic growth, but when that growth earn to a precipitate halt (never to recover fully) with the onset of the Great Depression, the Indies were no more developed in any meaningful sense than when Dutch-promoted

expansion list began on a large scale. The small modern sector Crowzk or Development? 1 5 1

of the economy monopolised by the Dutch was crisis-ridden and divorced from other sectors, while the huge rice subsistence sector on Java (where almost two-thirds of all Indonesians live) , was imprisoned more securely than ever within a selfperpetuating and ever more debilitating cycle of poverty, stasis and land hunger. As Clifford Geertz has demonstrated, this outcome was not due to any adamant resistance to change on the part of the colonised, but was a direct consequence of the manner in which Dutch economic and administrative policies operated to stifle innovating forces within ]ava.3 The economy as a whole was a dependent one, conforming to Andre Gunder Frank's model of a series of" metropoles and satellites ultimately dominated by and in the interest of the colonial power.4 Dualism, imbalance, and reliance upon exogenous markets, stimulants, skills and opportunities characterised the colony's economic makeup. \*Vhat, then, are we to understand by development as distinct from growth? Previous chapters in this book have discussed this issue at considerable length. Here it is proposed to do no more than point up the contrast between two different value approaches to the question. In our cinematic culture, a young woman with a large bust is commonly said to be well-developed, no matter that she be vapid, manipulated, exploited or constitutionally unsound. Women's Lib. has another, and to my mind more appropriate, notion of a developed woman, one who is aware of her social situation and capabilities, autonomous in her decision-making, struggling 3§ overcome the stiiiing pressures exerted upon her by a male-dominated world. Something of the same kind ca said of the problem of national development. The mere physical size of a country's GNP, or its rate of increase, is no decisive indicator of its societal health or its capacity to resolve the issues which agitate and confound its people. It is undeniable that some measure of growth is vital for countries with burgeoning populations and poorly mobilised resources. But for that growth to be developmental, it must be

so managed as to improve laze eeuntly's capability of inneeelirzg successfully on the basis of national resources and skills so as to meet

the needs of its people era some basis of equity and to withstand external pressures upon in. Ideally, I would want to go further and argue 52

I Nature of the Indonesian Experiment

that by development we ought to comprehend higher ethical norms which assure citizens of rising levels of life sustenance, freedom and self-esteem.5 However, to apply such criteria to Indonesia's present developmental problems would in practice be discriminatory, since strict enforcement of them would demand a reappraisal of the developmental claims of every nation on earth. Accordingly, for the purposes of this study, I shall operate within the First definition. Indonesia's long growth phase in the nineteenth and early twentieth centuries was in a colonial context, and consequently may be regarded as unrelated to the problem of her development, the prime motivation behind Dutch economic activity in the Indies being clearly that of Holland's advantage, it could

be argued that as an illustration of propositions about growth and development it is irrelevant to the situation of a politically independent state. On the other hand, there is no dearth of examples to suggest that the achievement of political independence need not ensure that economic growth becomes developmental. Latin America affords many instances of growth phases under 'neocolonial' conditions which have failed to produce development in my terms, OI1 the contrary, growth in these circumstances has undermined developmental capacities and perpetuated or recreated 'underdevelopment' in the sense of increased dependency, periodic crisis, imbalance and inequality Indonesia, I fear, is now in the early stages of such a phase of neocolonial growth, which is likely to be shortlived, to distort still further the economic and social structure of the country, and to leave the people less capable of generating those changes needed to bring about either greater general

well-being or political stability. It is true that there are contradictory tendencies at work in Indonesia, some of which appear to other some hope for development, If one adheres strictly to economic criteria, it is

possible to make out quite a convincing ease in terms of orthodox development theory in favour of Indonesia's development prospects. While I have serious quarrels with such an approach and the criteria for development which it employs, my main objection to it is that it is illegitimate and futile to consider economic movements in isolation from social, political and cultural factors, and when these are assembled into a total Growth or Development? | 53

r

picture of Indonesian change, then the outlook for development is very dismal indeed. From a strictly growth standpoint, progress in Indonesia since 1968 has been quite striking in the circumstances. After assuming power in 1966, the Suharto Government brought the inflation which it inherited from the Sukarno era under substantial control within three years, and began slowly to rehabilitate the country's rundown economic infrastructure. In 1968, it introduced a live-year plan designed to boost production in both the export and subsistence sectors, and accumulate capital for further growth. The plan, which was drawn up in consultation with \'Vestern advisory agencies, laid down a relatively orthodox attack on economic problems, including the application of strict monetary and budget controls, the freest possible operation of market forces, the attraction of maximum foreign aid and investment within broad parameters of constraint, the encouragement of such indigenous enterprise as would be able to function in a competitive international environment, and the stimulation of agricultural (particularly rice) production through technological and infrastructural improvements. Thc long range objective of the government was large scale industrialisation, which it conceived as the only sure solution to Indonesia's employment problems." By 1972, the impact of the plan was being felt in both the modern and subsistence sectors of the economy. Production was rising in both sectors, the GNP was registering an annual growth rate estimated to be between 6 and 7%, and exports

were showing spectacular rates of increases Until the rice crop failure in 1972, the country abpeared to be approaching its goal of self-sufliciency in that staple.*' I do not propose to elaborate on these incremental gains, but merely to indicate that I am fully cognisant of the achievement in growth terms that has been recorded. What I regard as offer greater moment for the future is the way that growth has been attained, and its social and political byproducts. . Indonesia's present growth phase is neocolonial in the literal, not the rhetorical, sense. Even so conventional an economist as Benjamin Higgins has drawn attention to neocolonial aspects of tbreign economic intrusion." As he recognises, the spectacular increase in Indonesian 54-

|

,Nature

of the Indonesian

GNP

and exports has been strongly in-

Experiment

JI

fluenced by massive injections of Western aid and a considerable and growing volume of foreign investment.11 A large proportion of foreign investment is of a classic neocolonialist character sunk into extractive industries such as oil, mining and timber-and, if even a significant amount of projected investment is realised, this type of activity will grow in import» once." It is this activity, too, which accounts for most of the expansion of Indonesian exports, rather than a recovery of ' most of the country s traditional export crops. 13 Investment in manufacturing activity is predominantly of three kinds, the .First two of which are again neocolonial in their effect: 'CocaCola' investment . 2 as it is called, which caters to the luxury -tastes of a small foreign and indigenous eIite;14 manufactures which compete with and replace products previously created local capital and l a b o r (this applies to at least part of the growing investment in textiles, as demonstrated in the appeals by indigenous entrepreneurs to the government for protection) ; and import-substitution items (pharmaceuticals, motor vehicle assembly, tores, construction materials etc.). Manufacturing investment is concentrated in the environs ofjalcarta and a few other large cities ( Bandung, Surabaja, Medan), thus enlarging the gulf in life style and wealth between the capital-centered modern enclave and the regions.15 Finally, foreign-promoted economic activity is overwhelmingly capital-intensive." While it is impossible to learn the precise impact it is having on unemployment and underemployment, it cannot by its nature (as '

demonstrated in the First two chapters) be expected to reduce

these problems significantly. . Like foreign investment, overseas aid also has a distinct neocolonial bias. Largely deriving from a Western consortium which meets annually to deal with its Indonesi an debtor, the aid consists largely of 'tied' loans loans made for the purchase of goods from the donor countries and loans earmarked for projects supervised by the donors).1"' Quite apart from the constraints in types of projects, goods, prices etc. which this places on Indonesia, the operations of the aid con~ sortie affect Indonesian development adversely in two major respects. In the first place, a considerable amount of the project aid is intended to provide infrastructural support for the operations Growth Of Development? | 55

of multinational corporations in Indonesia. An example of this is the amount earmarked by the Australian Government for the construction of port and other facilities at Tjilitjap in South Java. This is the site of a major project advanced by a group of multinationals and allied Australian corporations, which intend if possible to establish a number of heavy and medium industries in a new enclave. So far this particular project has not been approved by the Indonesian Government, but similar ventures funded by the United States, Japan, Holland and other countries have been. The effect of foreign aid in these cases is

to increase the economic leverage of the giant foreign corpora-.

sons on Indonesia, E gravate the tendency towards enclave development, encourage the trend towards capitalintensive development..

.

'

.

-

.

.

Secondly, current id is conditional upon the eventual repayment with interest, not only of" the amounts now being advanced, but of the very large amounts borrowed in the fifties and sixties. The grand total of this aid to date amounts to between five and six thousand million dollars, and the 'most optimistic forecasts envisage that Indonesia will remain dependent upon foreign aid and investment for. at least another decade." . . Although realism has led to forbearance iN seeking repayments on the part of the creditor nations to date, repayment and servicing of debts are going to become an increasing drain

_

.==

on the Indonesian economy in the future, and could quite conceivably end up outrunning overseas income from exports and new loans, as has occurred in the case of a number of Latin American countries." This is one of the common ways in which growth perpetuates or recreates underdevelopment. Many of those who remain optimistic about Indonesian development recognise the danger of these trends, but nevertheleSs argue that there are countervailing trends which encourage us to remain hopeful about developmental prospects. I think these arguments basically take two forins. One is that

foreign economic activity go demands for ancillary industries and services which Indonesians (private or govern~ rent) can provide, and so stimulates an indigenous economic upsurge necessary for development. The related argument is that the government also obtains funds from foreign economic a

56 | J\*'ature of the Indonesian Experiment

I.

1.

I

activity through taxation and other means, and these funds can be channeled -into development and social welfare?" Both arguments have force, and one can point to instances of such flow-ons already. But the crucial issue is not whether neocolonial tendencies are accord anted by tendencies towards national economic \»'val. It is whether, considering the gravity of Indonesia's problems, trends towards indigenous, labor-promoting activities are likely to.be on a sufficient scale to ease those problems and counter the anti~developmental effects of neocolonial growth. To assess this issue properly we ........ move .outside realm of strictly economic considerations and »into the world of men, where economic pursuits intersect with social, political and cultural factors and meanings. Under Guided' Democracy, the Indonesian Communist Party drew attention, quite accurately, to the emergence and consolidation Of a new social stratum in Indonesia-~the class of bureaucratic capitalists." This stratum was composed of military and civilian Officials who, because of their key positions in the politico.-bureaucratic apparatus, were able to obtain a purchase upon the modern sector of the economy (then in State hands), and, through the manipulation of state corpora»:m.mr.w»»...r*

-.

salimfnzc

tions, government funds and private business activity, amass

r

great wealth and power. In accordance both with traditional elite values and the economic realities of the time, they aspired to found, not liourishing entrepreneurial empires, but appanages, strategic bases for the exaction of tribute from society and the enhancement 'of their own status.22 These men were notorious for .their luxurious life styles, their imitations Of the

least constructive aspects of Western ways, their corruption, and the patronage they exercised in the area of politics."

Now what has happened under.the 'New Order' dispensed by 'General Suharto is broadly this. The new rich class of bureaucratic capitalists has grown somewhat in numbers as greater opportunities have been opened up by foreign economic intrusion, and still more in power as other political forces have been repressed or .captured by the regime. Of greatest moment for our purposes,'ho.wevcr, is the fact that the bureaucratic capitalists have moved decisively into the sphere dominated by foreign capital and taken on pronounced 'comp:radore' characteristics. In other words, with the inflow of large sums of Gfowtfz or Development? | 57

foreign aid and investment funds, they have synchronised their. interests and activities with those of overseas interests to their mutual advantage." . . The compradores include among their number government ministers and advisers, army generals, high bureaucrats, oiiicials of state enterprises, and a small but wealthy section of the Chinese business class. The best known of them is General Inonu Sutowo, head of the giant state-owned Pertamina oil co.mbine and its associated enterprises. Inonu Sutowo's success is integrally linked with the expansion of the international oil corporations in Indonesia, for which Pertamina is the Tnclo-. nesian agent and partner; at the same time, he is notorious for his corruption, his extravagant' life style, his patronage of the President and lesser political men and their' causes, 'and his invulnerability to exposure or criticism. lt would be wrong, however, to think that lbnu Sutowo is exceptional other than

in the scale of his operations; he is but the epitome of a class of operators whose economic interests, Status and life style are bound up with the roles they play as junior partners to foreign enterprise, administrators Of foreign and government funds, providers of services to foreign firms, speculators in building sites, purveyors of government licences etc." In turn, they play hosts to a legion of smaller parasites who act' as their outriders and dummies. j . . The compradorcs are already tlle most powerful single group in Indonesian society. To speak of the present regime as a military regime is. in significant respects misleading, sinee.it

obscures two important features of the' present dispensanion : that it is that section of the military which also-wieldssecononiic power that stands at the apes; of the power pyramid, and that this group of generals is intimately connected with civilian bureaucrats and a select group of businessmen who Partiei pate in their ventures. With a decade or more of foreign aid and capital inflow predicted, the power of the compradores will be augmented still further, as they are the necessary intermediaries between foreign interests and the Indonesian power structure, and the greatest indigenous beneficiaries of the activities of international capital in Indonesia." The compradores are not antipathetic to economic growth, on the contrary, under conditions offoreign-promoted economic 58 | Nature of the Indonesian Experiment

r I

I

boom; they are willing and eager agents for the facilitation of foreign economic penetration, and keen-eyed initiators of ventures on the fringes of foreign business activity. But their contribution to . development-to the enhancement of the country's capacity to innovate on a nationwide. scale-is minimal. Their ties to foreign capital, their concentration upon the most lucrative avenues for wealth accumulatioN, and their traditionalist aspiration towards status and prestige, all contribute towards their fixation upon the enclaves which represent. the small, modern, privileged sector'of Indonesia's dual.economy.2'* Thus they heavily reinforce the bias of foreign interests and the Indonesian Governnlcnt's economic advisers towards large scale, modern, expensive, capital-centered projects which any observer of Indonesia's current growth pattern is-forced to acknowledge. The symbol of their notion of development is bustling Jakarta, with its luxurious villas for the rich, its carefully graded motor car status worship, its gambling casinos, racetracks and thriving brothels, its emporia studied with imported goods, and its rigorous deportation of the unsightly miserables. . In the Cornpradores we Hnd in its most extreme forms that value mix associated with the metropolitan supercultUre of the large cities, VVcStern acquisitiveness allied with hierarchical notions of status, 3. formidable roadblock across the path of development." On the other hand, one looks in vain for social and political forces capable of resisting the economic thrust of the foreign enterprise and its Indonesian allies. Indonesian entrepreneurs are too weak in numbers and scale of operations, and too politically impotent, to pose a challenge to their dominance, as devout Muslims for the most part, they are moreover suspect in the eyes of the more secularist generals and Javanese hnreaucrats-28 The students and intellectuals. once

handmaidens of the regime, have been put firmly in their place and made aware of the fact that their role is limited to that of ~loyal criticism; their own mystification by the religion of growth reinforces their paralysis and frustration." The political parties and mass organisations have been emasculated and tamed." The great majority of the people, designated a 'floating 1nass', are denied any form of political participation and limited in the expression of their demands and grievances Growth or Development'

I 59

to the unsympathetic channels of the bureaucracy and local army representatives. 31 The politics of the regime, in fact, express the duality of Indonesian society most vividly. Power is highly centralised, organised explicitly along hierarchical lines, and pervaded by the mystique of a 'modernising' program unsullied by the 'disruptive' and 'divisive' effects of democratic participation in political life. Rights, responsibility, authority reside in the Jakarta elite, filter down through the military and administrative machine, and proceed from the assumption that the modern enclave is the sole source of dynamism and innovation. The vast majority of Indonesians--the peasants-are looked upon as bodok (stupid) and incurably backward, objects to be bullied,

cajoled and, where necessary, appeased by relief measures. The only significant group that can be said to have any discernible effect on economic policymaking besides the compradores is the 'Berkeley Ma{ia', the group of technocratic ministers and advisers in the Presidential palace circle." But there is no clear line to be drawn between the two. The patrons of the technocrats are also the friends and protectors of the cornpradores, if they arc not compradores themselves. v*Jerking under the inliuence of \fVestcrn financial agencies and Western economic theory, the technocrats, moreover, subscribe to an economic strategy which creates no conflicts in principle with the interests of the cornpradores. That strategy, as we have noted, relies on foreign aid and investment, accepts growth as the primary economic objective, and reposes its hopes for development in a diffusion of modernism and economic activity outwards from the modern enclave. While some of the techno-

erats are now coming to believe that diffusion requires some conscious government stimulus to create employment and relieve distress, their primary orientation is still towards the

rapid growth sector dominated by fore Q and comprador interests. Palliative measures in other fields will be tolerated-hy the compradores so long as the inflow foreign few is sufficient to cater to their interests. At the same time, these palliative measures will do nothing significant to promote development in the vast rural hinterland of Indonesia. To

appreciate this fact, we have only to examine briefly the dimensions of the problems of employment and land hunger. 60 | .Nature of the Indonesian Experhnent

There are no reliable figures on the extent of unemployment and underemployment in IndOnesia. The Central Bureau of Statistics, on the basis of the 1967 census, put the totally unemployed at 2.3% of the labour. force, or 840,489 persons," but this is certainly a gross understatement. For. what they are worth, the figures for underemployed were stated to be roughly one-third of the workforce or some 12 million souls.3* However, a more exact set of statistics which gives a sobering indication of the extent of Indonesia's employment problem is that specifying the annual number of new job seekers coming on to .the market. Taking the age of 17 as our base, then the number of new job seekers was two million in 1968, three million in 1971, and will rise over the following four years to a peak of 3.8 million in 1976. Although the curve declines thereafter, the figure will still stand at8.2 million in 1978. The comparable figure for the early l960's was l million. It is small wonder that Indonesia's Minister for Manpower has estimated that it will take 25 years of economic growth at a steady rate of 7% per annum to 'start solving the problem of unemployment and underemployment" There are no indications whatever that the present economic strategy is likely to make any significant impact on this problem. Foreign economic activity is overwhelmingly capital-intensive, and is likely to remain predominantly so, since the international corporations are geared to this kind of pattern." In specific instances, it can be demonstrated that their operations are .a

labor-displacing. Thus a new rubber crumbing process introduced into Sumatra has been estimated by an expert on the

industry to be ultimately destined to render redundant twothirds of the l a b o r force formerly engaged in it." Compradore operations are essentially similar, for reasons dictated by profit-

- of skilled l a b o r in Indonesia, and ability, the scarcitv J

not

least-prestige, the compradores are lustful for the most up-todate, streamlined and labor-saving techniques. A certaiN amount of additional economic activity with a larger labour component can be expected to get under way, but it will be sorely constrained by market limitations. Internationally, Indonesia is in no condition to compete with Japan, China, Hong Kong or Singapore in manufactured products, especially if it is borne in mind that, because of the realities of Girowék or Development? 1 6 1

L

power, national enterprise will continually be at the mercy of bureaucratic depredations and constraints. An adequate internal market, on the other hand, would require a notable change in the fortunes of the desperately poor peasants ofjava. Here again, however, we are confronted by the contrast between growth and development. Technological innovation by means of 'miracle rice' strains, fertilisers, improved irrigation techniques etc., have brought about what many have labeled a 'Green Revolution' on Java. Rice production grew between 1969 and 1971 to the point where it was anticipated that by 1974: IndoneSia would 'be seliisufficient in rice, in contrast to-the situation in 'die mid-sixties when up to l million tons a year were being imported prevent widespread starvation. Drought and Hoods in 1972 caused a sharp decline in rice production, and Indonesia was once again obliged to buy extensively on the world market. Nevertheless, it may be anticipated that, given average weather conditions, the growth in rice production will be resumed in 1973. Whether it will continue to outpace population growth for long is a question about which there is considerable dispute among agronomists, but at least .Java has earned temporary respite from its chronic rice shortage, and this may be considered a considerable accomplishment in growth terms. A more dubious proposition, however, is that the Green Revolution in itself will bring about beneficial social changes for the Javanese peasantry, a large part of whom are landless and the greater part of the remainder possessing some land cling to minuscule plots oflhali`a hectare or less. Close studies of

village economics in Gentral ..Ieve indicate that the small peasant cannot hope to make ends meet by technological

developments in rice production, he is fighting a losing battle for survival in which additional l a b o r outside his own land holding for both himself and his family plays an essential role. 38 It is also generally agreed by' those who have studied the problem at close hand that the greater ability of richer peasants and landowners to obtain credit at reasonable terms and utilise the new technology will increase their advantage over the poorer peasantry. It is more than likely, then, that land will tend to pass more rapidly from the hands of the poor to the relatively rich, enlarging rural inequalities and adding appreciably to the 62

I Natufre of the Indonesian Experiment

numbers of the landless. This is in fact what has occurred under the impact of the Green Revolution in the Philippines (rice) and the Punjab (wheat).39 As against this, some economists envisage the creation of greater l a b o r opportunities in the wake of the Green Revolution on Java. This, they argue, would result from two byproducts of technological advance. In the first place, the new

r

rice strains will permit the harvesting of two rice crops a year on a wider scale, and this in turn will demand greater use of l a b o r for planting, replanting, harvesting, hulling and transportation. Secondly, the larger incomes earned by those who take advantage of the "miracle" strains will raise purchasing power in the rural areas and stimulate a market for manufactured goods which can be met by local labor-intensive industries. There are, however, cogent reasons why this prospect should not be regarded with too sanguine an eye. First, if landlessness increases, as I have suggested it will, then new work opportunities (if they eventuate) may do no more than sop up the growing excess of l a b o r in the countryside. Second, since the Green Revolution cannot eliminate rice failures brought about by adverse climatic conditions, local industries will operate in a very insecure market, and. unless propped up by timely government subsidies (which is unlikely, given elite priorities and the character of the bureaucratic system), would throw their surplus l a b o r on to the market precisely when rural conditions were most depressed. Third, neither the extent of the area in which double-cropping can be introduced de novo

(it has long been practised in many parts of" Java), nor the numbers of those whose incomes are likely to rise markedly above the subsistence level are large enough to create a market

for consumer goods significant enough to make substantial inroads on the problem of rural unemployment. Fourth, such market opportunities as may be opened u p in the countryside are more likely to be seized by urban manufacturers using capital-intensive methods and hence making little if any contribution to the solution of the unemployment problem. Finally, there is already evidence that technological accompaniments to the Green Revolution include labor-displacing farm Inacllincry such as rice hullers, which further undermine

the already desperate situation of the poor and landless peasantry.'*° Growth or Development?

I 63

The balance of indications, then, is that the end result of the Green Revolution will not be a new rural prosperity for the millions, but further landlessness, unemployment and endemic rural poverty. Clifford Geertz' conclusion is as valid in 1973 as it was when he made it more than a decade ago In the absence of any genuine reconstruction of lndonesian civilization are) alteration of the Persisting Pattern of its development, Pouring fertilizer on .java's Lillipnlian fells is likely, as modern irrigation, lab.onr-intensive cultivation and drop elzoers cation bglOre it, 150 make only one thing grow: paralysis." Putting together the two main sectors of Indonesia's economy, then-the small modern sector and the huge subsistence sector-we arrive the T-allowing perspective: the divergence between the tiny enclave economy and the vast rural distress areas will be greater an ever, the former will fail to ignite development in the latter, Which in turn will continue to act as a brake on development generally. just as the world rnetropoles will batten on the whole Indonesian satellite, so will the subordinate rnetropole of Jakarta batten on the regional enclaves (Bandung, Surabaja, Medan etc.), which in turn will feed on their small town satellites, which in turn will peck at the rural heartland of the country, very much after Andre Gunder Frank's Latin American model." Neither large scale industrialisation nor technological revolution in the countryside are answers to Indonesia's urgent developmental problems. There are many insuperable obstacles

.

. ..

to industrialisation on a scale sufficient to meet her needs, some of which have been canvassed in this and previous chapters, but

time alone rules it out as a viable strategy. Under far more favorable conditions than exist or are likely to exist in the future in Indonesia, it tookjapan 70 years of rapid industrialist son to reduce absolutely the size of its rural population." It has been estimated that to achieve the same result in India would require 125 years of steady 7% annual economic growth." It is safe to say that Indonesia is no better placed than India. One would need to be a devout Zen Buddhist indeed to imagine that she will be afforded that time and those stable conditions in a world so uncertain of its ecological future as the one we live in. There is no guarantee that any conceivable strategy would 64

| Nature of the Indonesian Exponent

assure Indonesia's development, but there are approaches other than the one presently being adopted which would appear to be more appropriate to her situation and resource pattern, and therefore more hopeful of success, These approaches stem from the favorable aspects of developmental experience in China, North Vietnam and Tanzania. \Nhat is common to these countries' experiences, that which entitles them to be regarded as the most developed (though not the most prosperous or rapidly growing) countries in the Third World, may be summarised very briefly in these strategic principles : The pursuit of. political and economic independence and self-reliance, repudiating the traps of foreign dependence, mechanical adoption of foreign models, and fixation on growth as the overriding consideration, The selection of the village, or rural district, as the hub of the developmental eHlort, aiming at balanced growth congenial to the local culture and diversification of the local economy through the introduction of low scale or medium scale industries catering in the first instance to the needs of agricultural development, peasant requirements and available labour resources; The conscious adoption in planning of normative goals for development, in which an egalitarian ethic is central, An approach to the peasant which views him not as a barrier to development, an object of history to be lugged screaming into the modern world, but as a subject whose collective potential is the most valuable resource for development the

. . •

.

country

POSSCSSCS,45

Such approaches, of course, demand radical political and social changes as their prerequisite. They are unthinkable without the destruction of the power of those social classes or groupings whose interests and outlooks constitute an insupcrable barrier to the mobilisation of the population for the goals of development. They require a political instrument-a mass party--dedicated to those goals, capable of imbuing them among the people, and receptive to the needs and demands of the villagers. In none of the countries mentioned do these characteristics exist in any unalloyed form. Nor have they

reached their present levels of development (which in growth terms may be very modest, but in social terms are compelling) Growth or Development?

I 65

without painful adjustments and grievous errors. In China, for instance, a vainglorious attempt to leap into greatness and

prosperity, to 'catch up' with the industrialised states (speciiically with the United Kingdom) led to a debacle in 1958 which took years to overcome. The fact remains, however, that these countries show none of the extremes of imbalance or of wealth which mark other countries of the Third world, despite or (as I would have it) largely because of the large amounts of aid and foreign investment some of the latter have received and the

significant growth rates some of them have for a time achieved, and they are moving selfconsciously and with growing assurance towards the creation of societies which balance the needs of economic growth against the promotion of human dignity and individual initiative.

To be realistic, however, one must face the fact that there is no possibility of the present Indonesian Government adopting such a course, for reasons that have been stated. For Indonesia, a developmental course appropriate to its situation would demand a political and social revolution of which for the foreseeable future there is no prospect. This is no reason for investing false hopes in the country's present growth spurt, however. That way lies moral complicity in the depred ations of the industrial powers, multinational corporations and Indonesia's own comprador class. It a l l renders us unable to anticipate the convulsions which, if this analysis is correct, will surely follow the failure of Indonesia's latest false start on the road to development.4!' If only the truth will make men free, then it is the truth, with all its unpalatable consequences, which

must govern the search for means of overcoming Indonesia's deepgoing ills.

66 | Naiute of the Indonesian Experiment

CHAPTER 4

-

KEN WARD

Indonesia's Modernisation: Ideology and Practice

In 1971, President Suharto's government achieved an immense. victory in Indonesia's second general election. Golkar, the government-backed federation of non-party organisations, won a nation-wide vote of 62.9%, which yielded a massive majority in Indonesia's central parliament! However, the election was subjected to large~scale manipulation, and the results cannot be considered a reliable index of popular support for the government? But the election was of value in highlighting the ideological precepts of the New Order regime and in revealing how far removed is Indonesia's contemporary socio-political structure from attainment of the egalitarian ideals of Indonesia's revolution. Sympathetic and hostile observers of the New Order concur that Suharto's is the most authoritative government Indonesia has ever known. The origin of its strength lies in the destruction by the Indonesian Army and its allies of the time of the only organised counter-forcle it confronted, the Communist Party of Indonesia. The extermination of thousands of communist cadres and hundreds of thousands of party followers and sympathisers is the fundamental fact of the New Order, although it remains a phenomenon whose ramifications have yet to be thoroughly analysed. Sullicc it to say that the bloody resolution of the crisis of the Old Order bequeathed to Suharto a polity less convict~:ridden, less open-ended and less explosive than that of Guided Democracy. The discrediting of the PKI, managed highly skilfully by the Army, has made it inconceivable that any organisation that might be tagged "PKI" should be able to garner widespread support for many years. The major political forces surviving Sukarno's fall are all un.. . . . unist, whether they he radical or conservative nationalists aditionalist Musliins or Modernist' -..

.Modernisaliom Ideology and Practice

|

67

Muslims whose ideas were modem at the beginning of the century, the Armed Forces and the civilian bureaucracy, OI' the Westernised intellectuals who once called themselves "socialist" and are now as socialist as W`alt. W. Rostov. The anticommunist consensus linking these groups is probably the strongest ideological bond among members of Indonesia's elite since the armed struggle for index evidence from the Dutch. How widely' anti-communism is shared among the Indonesian masses is harder to ascertain. Too little work was carried out on the PKI during the crucial years of Guided Democracy for us to determine the success of the communists in broadening their base of support or to evaluate how that success was achieved, altliougli it is clear that on Java, cornrriunlst agitation

over land reform produced a la/Iuslim backlash of staggering intensity that culminated in the 1965-66 massacres Thereafter a general fear has pervaded the rural population-fear of the

accusation of communism, fear of the Army, fear of revenge, fear of the p e p e trators of the massacres, tear of politics? When communists began to be released several years ago, many stayed within their homes for many months after their release , the conversion of many Javanese to Christianity or Hinduism, or their involvement with mystical sects, are further expressions of fear. Through fear, then, the peasantry of' Java is forcibly bound to the anti-communist consensus. Deriving thus from the elimination of the radical wing of Indonesian politics, % New Order government's strength has mm consolidated through the rnilitarisation of the bureau,,,,_ cratic administration, .the purging, centralisation and inte-

gration of the four armed services, and the reduction of the political parties and mass organisations to sterility and powerlessness. My concern in this chapter is principally the latter, the exertion of intensified control over the non-governmental sectors of the society of the New Order.

The non-communist political parties, which had existed in various degrees of disarray since the overthrow of parliamentary

democracy in the late fifties, have been further enfeebled by Suharto's government. The Nationalist Party (pm) was purged of left-wingers and some Sukarnoists in its first post-coup congress at Bandung in 1966, when protagonists of the new regime intervened on behalf of rigllt~wing allies in the party. 68

1 Nature of the Indonesian Experiment

In the next few years, however, even the rump PNI was hardpressed throughout the country, as military commanders more anti-pnI than Suharto moved to have its activities suspended, its Sukarnoism recanted, its doctrines :robbed of any critical cutting-edge or radicalism, and its militants imprisoned. The heaviest impact on the party's ailing organisational structure was felt at the lowest administrative levels, the sub-districts and villages, where party office-bearers, frequently government employees, were most easily intimidated both by the government and by Muslims and anti-Sukarnoists eager to settle

scores,

Whereas

PNI

branches at the village level often disappeared

entirely, at the regency and provincial levels party execu times

survived, but at the whim of corresponding military commanders, who from time to time intervened in party affairs to advise which party leaders would be acceptable as ofiicebearers. If the 1966 congress intervention had aided rightists against the left and centre and had been in tune with the logic of the New Order's accession to power, a further intervention by Suharto in the following congress in 1970 discriminated between two rightists, the favored rival being supported both because of his influence within the party and because he was less inclined to attack military rule and privileges.5 In sum, live years after the coup, in the year Sukarno himself died, the PNI was a badly divided party with its organisational structure

severely strained, the size of its mass support completely in doubt, and its leadership weakened by deliberate government policy. The elimination of communists had brought an outburst of political energies from Indonesian Muslims, many 01" whom had survived very insecurely through Guided Democracy. Fervour was greatest among the young and among the modernist section of the Islamic community, whose organ had been the Masjumi party proscribed by Sukarno in 1960. Once Suharto was firmly in power, l\'Iasjuzni supporters endeavored to persuade him to permit rehabilitation of that party, and when this proved unsuccessful they resolved to form a new political party, called Parmusi.*' Parmusi came into being in February 1968, but its leadership was largely determined by Suharto, who feared that the party would be too strong and too disposed Modernisat£on.' Ideology and Practice

69

to raise divisive issues if led by the highly authoritative men of the old Masjumi leadership. At the end of the year, the first Parmusi congress elected several Masjumi leaders to the executive, but Suharto refused to recognise the new elected executive, and the appointed but rather indecisive first executive remained in power for two more years. Masjumi had once been one of Indonesia's two greatest parties, and had been the largest Muslixri party, but in the circumstances of the New Order its successor was quite unable to recoup its former influence. Apart from the parties discussed above, leftists were removed from the small Muslim party Perti, and civilians prominent in the anti-Sukarno struggles of 1965-66 rose to high office in several minor parties and in the traditionalist Muslim NU

(Nahdatul Ularna) party. Until 1970, government policy vis-a-vis the parties could be understood as based on the desire for anti-Sukarnoist but not strongly Islamic politicians to lead the parties so that a centrist balance could be preserved between nationalism and Islam. But since 1970 these motivations have been less paramount than the need to place politicians at the head of parties who are uncritical of the government and were unlikely to lead party campaigns vigorously in the 1971 election. In April 1970, as we have seen, the PNI obtained a chairman known for his unwillingness to criticise the military governrnent."' In October, the increasing outspokenness of the appointed Par nusi executive was punished through engineering of an internal coup in the party, whereby several low oilicials on the central executive, previously cultivated for some time by Suharto's advisers, declared a takeover of the party and the abandonment of the former executive's policy of "confrontation" with the government. Suharto was called upon to mediate between the two factions, only one of which had widespread support throughout the country, and he chose one of his own ministers to become the new party chairman, thereby throwing the party following into utter disarray and causing substantial lower-echelon disaffection with the party leadership. Also late in 1970 there was anger in many sections of the press over a congress of the Journalists' Association con~ corning the procedure by which a government-favoured canbe

70

|

Nature

at the Indonesian Experirnenr

dictate for the chairmanship had been elected, and there were numerous reports of government manipulation of leadership contests in other professional organisations as well as in several small parties. It was r u m o r e d that several members of the NU central executive were lighting a determined battle to avoid the holding of a party congress before the election, because that would merely invite government intervention. The predicted interference duly occurred when NU eventually held a congress in December 1971. In short, through government action the autonomy of political parties was finally destroyed, party leaders were made almost totally dependent on government favour, and continuity of leadership was disrupted at many levels. By continuing to inflict extreme penalties, whether execution or imprisonment for indefinite periods, against those who had participated in communist politics, the new government had at its disposal an example with which to threaten critics from all parties and to discourage any from engaging in active politics. Moreover, the opportunities for obtaining patronage via membership of political parties had been severely diminished as more and more regional administrative heads were appointed from the armed services. As the selection approached, the loosely-knit federation of non-party organisations called Golkar (Golongan Kala, or Functional Groups) that had been established by the Army to counter the PKI in the early sixties was revivified and expanded at the expense of political parties and their affiliate mass organisations. Though originally claiming to represent that section of the indonesian people not linked to parties, olkar was pushed outwards to encompass HE civil service, Eabour civil unions and the party masses in g . countryside. bureaucracy was incorporated within Golkar through the enunciation of a doctrine called 'mono-loyalty', which stipulated that employees of the government should submit only to the directives and demands of the government and should renounce any fealty to other organisations, such as political parties. In practice, this meant that many who had previously been local leaders of parties were forced to out their ties with them. Furthermore, most of these and other administrative ol'Hcers were expected to use their iniiuence over the population to obtain mass support for Golkar. ¢

M'oderrzalsam'on.' Ideology and Practice

I

71

The pre-election activity of Golkar did a great deal to destroy the Indonesian l a b o r movement. Indonesian trade unionism has never been very strong, partly because the country's factory-employed proletariat is "'""*1" s m a l l - s function of Indonesia's limited industrialisation - and partly because trade unions are inherently weak in situations of large-scale underemploylnent.8 The PK1'S affiliated federation of unions, soiasr, had dominated the union field until the coup, and its dissolution and the associated killings and railings drastically enfeebled the whole movement. As Golkar contained within it many non-party unions even before 1970, it was a simple step to incorporate party-aliiliated unions in the 1970-71 period. Trade union branches or units in many factories and state

enterprises were dissolved in the pre-election months by command of the management, and all their members enrolled in a Golkar union. The rationale was that party-tied unionswere not independent and were not motivated purely to promote the interests of laborers, who were in this way unnecessarily divided by extraneous political differences. In factories, local Army representatives were on hand to explain the Golkar purpose and to confirm that the laborers' interests were identical with those of Golkar. Even in private enterprises which were theoretically independent, military pressure was often used to force the e l i s t e n t of laborers to Golkar ranks. When one considers that the peasantry was a free target for Golkar recruiters as well, the size of Golkar's passive, partly involuntary constituency may be comprehended. Golkar was

in a sense the list state party Indonesia has ever known, expanded from above for the purpose of winning the election and simultaneously destroying the considerable residue influence of the established political parties. :But in another sense it was a no-party for it virtually ceased to function after its electoral triumph. In any case, the passivity of its following sits well with the vision. of Indonesia's future presented by leading Golkar spokesmen. Ali Murtopo, for example, the head of OPSUS and a key lieutenant of Suharto, gave a lecture in Surabaja shortly after the 1971 election to a gathering of university students assembled from throughout East Java." Ali observed that there were three classes in Indonesian society : the Jarojatza (graduate) class, the middle class and the lower 72

I Nature of the Indonesian Experiment

class. As historical conditions had caused a vacuum in the middle class, graduates would occupy the position of the bourgeoisie and would co-exist with a lower class. It was the role of the armed services to rule and protect the country, it was the role of graduates and technocrats to administer economic development, while for the majority of the population there was the residual, humble role of 'participation'. After the election, igseries of official state merits announced 1 rural masses of Indonesia would be designated a 'Heating mass': the floating mass was to be created by dissolving the branches of political parties and Golkar below the regency level. Thereby* freed of political concerns, the former party followers would be able to devote themselves single-mindedly to economic construction leaving politics to their representa-

_

tives in the legislatures. Golkar itself suffered little by being compelled to dissolve its village and sub-district branches. The theory was that between elections the masses would 'H_oat' adrift from party or Golkar ties, yet Golkar had never become a cohesive organisation in its own right. Gollrar's local organisation had been built anus

around the local administrative, police and military oHices, all

of which lost no authority through the symbolic dissolution of Golkar offices. So in elTect the ushering in of the era of the floating mass is another step in the reinforcement of government control over the population. One should avoid exaggerating the significance of this change, since parties have in recent years not been important instruments for the articulation of popular demands. Similarly one should not assume that today's

military bureaucracy will be totally unresponsive to local grievances, nor that it is a unified machine without factional divisions to be exploited by civilians. But it is a fact that official control will be easier with the removal of non-govern~ mental bodies hitherto exerting considerable influence over the rural population. The political structure obtaining in the floating mass years is schematically very simple: power is in the hands of the armed services interlocked with the bureaucracy, and wisdom is possessed by the technocrats who manage the country's economy and advise the country's rulers. This emphatically hierarchical political system, in wtiicli the great majority of the In/Iodezvnisaliorz s Ideology and Ptaczfice

|

'73

people are legally powerless and potentially unheard, is conceived by Indonesia's rulers to be 'modern', for Golkar's victory was acclaimed by its leaders as the opening of an era of accelerated modernisation (akselerasi vnodernisasil. Guaranteed twenty-live years of modernisation it was boasted by one key general that Indonesia's economic growth would surpass .]apan's.10 Let us examine the roots of this conception of a modern society in order to understand how the restoration of' a

highly stratified polity, resembling either a pre-eo] nial kingdom or the polity of Dutch colonial rule, has come to be celebrated as an advance towards nlodernity.11 The ideological underpinning and justification for the formal erection of a lnerarclncal soclety derives from a

marriage

between traditional elite attitudes and perspectives borrowed by Indonesian intellectuals from the influential 'political development' and 'end of ideology' schools in American social science. The simplest expression of the condescension with which Indonesia's uneducated masses have traditionally been viewed by their superiors is the well-known adage: rabat rrzasilz bodok (the people are still stupid, not yet enlightened). The enlightenment which is thought to be needed to overcome this "stupidity" varies from the refined mysticism, art and etiquette of the Javanese ptgaji (nobility and lower nobility), through the democratic and socialist doctrines of the early twentieth century, to the credo of post-war Western social science to be examined below. Traditionally, enlightenment in the Islamic religion was pursued in institutions hierarchically ordered, wherein students 'graduated' from one book of scripture to another." Anderson has similarly drawn attention to the PK1'S hierarchically-organised educational program by which party members were gradually initiated into the inner secrets of the party's ideology." The perceived stupidity of religious students, P14I membership-candidates or the masses in general provides the justification for their tutelage by men already enlightened, but provokes varying responses in the tutors concerning their determination to eradicate ignorance. In the traditional religious schools called pesantfezrz, there was no possibility that religious students would ever gain greater wisdom than their instructors. It is impossible to say whether the PSI, having assumed power,

I

74: .Nature of the Indonesian E/periment

1

r

would have devoted itself to expanding mass education in a 'de-hierarchised' and demystified way as the Chinese communists have done, making it thereby readily comprehensible rather than awe-inspirin.g.14= Clearly, however, in contemporary Indonesia the prevailing attitude that the people are still bodotz, whether traceable to the Prijaji backgrounds of Indonesia's military bureaucracy or to the perceived seltlintercst of the technocrats, is related to no scheme to educate the populace, but rather supplies a rationale for continued manipulation and authoritarian rule. Far from educating Indonesia's masses within the framework of a world-view based on ideology, as is attempted by MuSlims and communists, the leaders of the New Order are convinced that 'de-education' is required to rid the people of the ideological thinking that has "poisoned" Indonesian politics since independence. In the New Order there has developed a cult of non-ideological pragmatism pioneered by a group of intellectuals close to Suharto's regime, who include both technocrats advising the government's handling of the economy and academics and others formerly involved in Action Fronts who have immersed themselves in movements to transform New Order .politics that culminated in Golkar. Largely former followers of Sutan Sjahrir's proscribed Socialist Party, these men are heirs to two traditions, that of Sjahrir's own alienat from Indonesia's major political ideologies, and of the anti-ideology mainstream of American social science most recently revealed in the literature on political development. Anti-communist intel-

u.

lectuals and students opposed to Sukarno read the work of

such writers as Pye, Weiner, Palombara, Almond and Coleman during the harsh years of Guided Democracy, when such Western 'textbook-thinking' was frowned upon by the regime. The 'end otideology' school, it may be recalled, emerged in the fifties in the writings of Daniel Bell, Seymour Lipset, Arthur Schlesinger and others, appearing to rest on a foundation of complacency in the industrial order of the USA. Most major social problems were considered to have been solved therein, and the traditional role of free-floating intellectuals propounding radical programs for social transformation thought to have been robbed of any relevance. In particular, the ideologies that had 'ellded' were those that questioned the Modemisation.° Ideology and Practice | 75

framework of capitalist democratic society, and it was acknowledged that nationalist ideologies, for instance, still flourished in other parts of the world." The belief that ideology had become obsolete in part guided the early writers on political development during the sixties. Almond and Powell, for example, asserted that one of the indices of political development was increasing secularisation and abandonment of ideological preconceptions : The dominant and legitimate culture of totalitarian .ysterns is

ideological in its intellectual characteristics. There are ltrntts on rational calculation and analysts. The ideology sets certain ends as absolute, and treats the Cornrnnntst Party as the sole interpreter of ends ana' selector of means. Decision making, thats, lends to be relatively rtgtcl to comparator; with the more open process of balancing and combining ends and means characteristic of the political process to tally drrentiated and seenlartsecl denzocraciesd s I do not intend to discuss the ideas of the end of ideology thinkers with reference to their own society, although the upsurge of American radicalism during the sixties tended to cast doubt upon the prognostic skills of that school of American liberals. But it is an irony of the highest order that these ideas were welcomed in Indonesia during the mid~sixties and have been tended there with great care. The Sjahririan intellectuals had been alienated from all of Indonesia's major parties, which had easily defeated S.jahrir's psi in Indonesia's first general election in 1955. They found party ideologies either too traditionalist in the case of Islam and _Javanese nationalism, or too injurious to their interests and their values in the case of

communism. Nasakom, the symbolic unity of nationalist, religious and communist forces which Sukarno tried to forge in Guided Democracy, came to embody for these intellectuals the very divisiveness of political ideologies, and they castigated 'the evil of the Nasakom doctrine, which poisoned our society in the Old Order. The doctrine prevailed as law and imprisoned the people in separate, iron-clad boxes'.17 Thernassaeres of 1965-66, in which communists of` the socio- cultural grouping.. for aiiran) known as the abangan or noln Muslims were largely slaughtered by devout Muslims, limed the intellectuals'

hatred of ideological divisions in Indonesian society." In reaction to the psi's defeat at the hands of idczologfcaiiy-

I

76 .Nature of the Indonesian Expwfment

based mass parties and to the conscious, atavistic ideologising of Sukarno, and influenced by the mainstream of American comparative politics, civilian intellectuals constructed an antipolitics doctrine and recipe for Indonesia's modernisation that bloomed luxuriantly in 1971. Beyond its appeal for technocratic leadership and its usefulness as justification for military rule, thereby legitimating the position of the powerful as well as the highly schooled, the essence of the doctrine was its imitativeness and its divorce from Indonesian sociological reality. When reading the columns of the 'modernising' press or attending fervent discussion groups of modernising students, it is the borrowed language that first strikes one. A speech especially laden with Western social science terminology may contain, in English, the following words: interest articulation and aggregation, solidarity-making and problem-solving, social participation, modernising agents, authoritative structures and non-authoritative structures, political communication and multiplier e1°lleets. One issue of a modernising paper such as the student weekly .Ma/zasiswa Indonesia may include articles invoking the authority of Karl Deutsch, S. N. Eiscnstadt, Herbert Feith, W'ilbert Moore and Lucian Pye. The esoteric vocabulary used in foreign universities has clearly been adopted by the Indonesian cognoscenti much as Arabic was adopted for recitation rather than for direct under-

standing in the _Pesaztefreiz of old Java, mastery of its expression being intended to indicate the speaker's access to mysterious

knowledge and claim to power based on control of that knowledge. Occasionally, t o , the VVeste;rn terminology is used without its meaning being under food, so that one Ends, for example, 'interest articulation' so robbed omits original meaning as to be cited as the reason for restricting the activity of political parties to the level of regency and above." Of greater signilicanee than mere terminology is the fact that the concept and vision of modernity has been borrowed from the West, and the choices facing Indonesia have been structured in terms of whether Indonesia will succeed in 'catching Up' with the West or will 'remain behind', that is, whether Indonesia will be able to move towards the kind of society now existing in the "Test and/or Japan or whether Indonesia will stay as it now

M0dern£sat2'0n: Ideology and Practice [ 77

is. The process of development followed by the West has been seen to consist of economic growth which, rendering ideologies obsolete, is followed by the achievement of pragmatic consensual political democracy. In this view, the stability of modern democracy is attributed not only to economic prosperity but also to the nature of the political system, and consequently there have been attempts to transplant features of 'stable' Western political systems to Indonesia. The most noteworthy of these was the abortive movement for a two-party system promoted in lIVest Java in 1968-69, one can also point to the floating mass concept itself, for it was adopted partly with aN eye towards the situation prevailing in Western systems wherein most of the _population are not members of political parties and only interest themselves in politics on the occasion of elections. The definition of modernity in terms of industrialisation and "3"

pragmatic politics (to be obtained in that order or the other

way around) was consistent with the comparativist perspectives that implicitly defined a country's modernity by its proximity to the idealised, pragmatic stability of American democracy. But it also reflected the Failure of the preponderant Indonesian political theorists of the post-65 period to base political thought upon sociological reality. Group conflict is one aspect of this reality to which little or no attention is given by these intellectuals. Most Indonesian writing about Indonesian society has analysed it in terms of the leaders ltekolz) and the masses or little people (orarzg ketjil), seeing no contradictions between them. Ruth McVey has noted that it is not surprising lo observe that the idea of class

struggle was missiagfrom [Sizkarrzo] vision of lrielortesian Politics, as it was for so many ot/'ter radical uatiorialists wlzo otlzerzoise lrorrowed heavily from _/Worx. As members of an aspiring elite, linked by ties of family arzol cultural background to traditional ojieialeiom salz leaders had little interest in promoting on eoerturrz that would go Mach farther tlzarz replacing Netlzerlarztls rate with their 0wrz.20 The threat

...

that the PKI posed throughout the post-independence period, and the anti-co mmunist atmosphere of the New Order (which

banned the teachings of Marxism), made it even more unlikely that the dominant thinkers of this period would look at Indonesian society with an eye to potential conflicting interests a l o n g classes.

78 | Nature

of the Indonesian Expedient

Furthermore, although intellectuals bent on rnodernising the country have freely castigated the traditions of the major sociocultural groups that they consider outworn, there has been a marked unwillingness to venture into rural society to investigate the traditions they see as needing to be overcome, This reinforces the failure to perceive the structural causes of Indonesian politics that is most marked in the belief that imported political ideologies virtually created ideological divisions in hitherto harmonious rural Indonesia, and also is evident in the conviction that an increasing scale of production without accompanying transformation of the social structure will create a modern Indonesia. If the inclination to view society holistically

and the unwillingness to study the links between social organisation, religious beliefs and political participation more carefully are borne in mind, the observer can better understand the reasoning behind the idea of the Heating mass, and better predict the likely outcome of its implementation. As the rnodernising intellectuals see it, the masses, freed from involvement with the ideologies of political parties, will gradually become attracted to organisations such as Golkar that owler programs to improve their economic lot. As the benefits of economic development are tasted by all Indonesians, Indonesia's masses will realise the advantages of a purely

economic orientation which will be provided through a rising standard of living for all as the inexorable process of economic growth occurs over the next two decades. It is believed that twenty years of growing prosperity will convince the peasants of the foolishness of ideological preoccupations, and then conceivably the tutelage period may be brought to a close. This optimistic perspective not only ignores the depth and duration of aliran attachments in Indonesia, but also overlooks the trend for the benefits accruing from economic development to be highly unequally shared. At the present, the introduction of large enterprises with machine equipment is having a disastrous effect on hand-loom weaving concerns in Central E) Java, to quote but one msfance. ...5 ctober 1972 it was reported that 30,000 small enterprises have closed down in Pekalongan, Solo, $1 Sukohardjo, Djepara and Tegal, putting thousands of v -,...-..lm and forcing them to

;

.nu

return to tlleir villages as, we Indy assume, somewhat disModernization : Ideology and Practice | 79

illusioned recruits to the floating mass. In September, it was likewise reported that owing to the emergence of crumb-rubber works, Hve thousand workers in Djambi had been put out of work following the closure of rubber refilling plants in that [email protected] The data on the eHleets of the Green Revolution outlined by Rex Mortimer in the previous chapter similarly increasing .. unequal distribution of wealth indicate . resulting from agrlcultura innovation. The masses of to t je rural hinterland are evidently not being aided in the reshaping of their thinking by improved health serviees,- distribution of doctors in Indonesia is still thoroughly unbalanced to the advantage of the major cities. In ».

1972 there were some 7,000 doctors in the Indonesian arcllJ~ pelage, of whom 2,000 lived in Jakarta, and almost 2,000 more in Surabaja, Bandung, Semarang and Jogjakarta. The ratio of doctors to population was reported to be l : 5,000 in

.

the capital city, and I : 1,000,000 elsewhere." Nor is there much chance that the [looting mass will improve itself through education. Several years ago, Education Minister l\-'Iashuri

revealed that of 47 million Indonesians with the right to obtain education, there existed facilities for only 12.5 million. Of the 6.9 million with the right to higher education, facilities existed for only 127a000. More recently he drew attention to the

fact that 67% of primary school children drop out because their parents are too poor, and he stated that only 1% of children in primary schools will have the chance to reach higher education- He estimated the daily income of parents of primary

school drop-outs to be four cents." The indications are that the leaders of New Order Indonesia

are aware of the trend for inequalities to grow and are unwilling to take steps to counteract this trend. Moreover, the advance of an individualist philosophy that underlies borrowed formulations of the meaning of modernity will intensify inequalities. An alternative formulation, which has little chance of adoption by the present government, would immediately take into account existing inequ alities and make their reduction one of the central criteria of the attainment of a modern Indonesia. It might tackle the problem of the denigration of the countryside, despised by so many of today's urban Indonesians either because of the alleged backwardness of the 80 | .Nature of the Indonesian Experiment z

peasants or because of the primitive facilities for entertainment and comfortable living, and so make possible the even distribution of Indonesia's scarce medical personnel. It might also envisage the transformation of the educational system to ensure basic education for all. None of these changes would require a social revolution in Indonesia, but there is little possibility of success for any, given the disastrous glee with which Western doctrines have been absorbed, and the degree to which open and conspicuous consumption of Western-style luxuries has become a hallmark of status for the leaders of the New Order. More generally, a definition of modernity that promised to solve some of Indo~ nesia's major problems should be designed to restore traditional cooperativeness to a central place in Indonesian social life and to reinvigorate Indonesia's religio-cultural traditions in such a way as to give Indonesians a focus of orientation to face the large-scale transformation of the country necessary to extirpate poverty. But such a reinvigoration would have to be effected with sufficient sophistication to prevent outbursts of aliran hatreds and vengeance-seeking. One can imagine an attempt, for example, at combining aspects of the abangan world view with that of traditionalist Islam found in the Perantrerz and the NU party, for both are highly Javanese cultural expressions. Failing such a conscious effort to construct a broader yet culturally-rooted world view capable of uniting Indonesians now successors to different cultural-religious traditions Sharp conflict along traditional lines will only M avoided thought intensiling repression. Assuming that many of the New Order's leaders remain convinced that ideologies must be thrown overboard rather than effectively wedded to provide a comprehensible vision of the future, what can be expected of the Heating mass? Given the evil reputation of the PSI, and its failure hitherto to reach devout Muslims, and given also the continued integrity of the Army's repressive apparatus, there seems no prospect that any very powerful movement of social radicalism will appear within the next decade. It is more feasible to anticipate that mounting iinpoverishment and inequalities will give rise to outbreaks of the anomic agrarian radical action that has characterised .]ava's history for several centuries. Santoro Kartodirdjo has Alociemisaiion ° Ideology and Pmciice

I

81

written that, again and again in the stacly

of

incl ourselves faced with a reworking

jaca's social rnovernents, we

of

cultural in izeritances. This

creative adaptability means that rnillenarianisrn in Java can Probably maintain its Popular appeal inde.;initely,' the manifest content of Rata Anil expectations is constantly being revised according to changing conditions. Onr> . . ' . ' indicates that agrarian unrest expresses itself in snclz .forms Eecaase only more or less traditional beliefs arc practices lzaoe a genuinely Strong and meaningful appeal to the rural

.

palation.2'*

revolutionaries

-,Ee impossible to predict whether social will be able to exploit adequately whatever

agrari an unrest may come to be expressed. However, although these 'more or less traditional beliefs and practices' have earned the undisecrning scorn of Indonesia's modernisers, as Indonesia retreats further from attainment of the 'just and prosperous society' promised by its revolution, its traditions may have their revenge.

82

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Experiment

CHAPTER 5 -- PETER BRITTON

The Indonesian Army: 'Stabiliser and Dyna riser'

My intention in this chapter is to make some observations about the role of the Army in Indonesian society and to demonstrate the inter-relatedness of its political repressiveness, its structural position in the economy, and its cultural orientations. By far the most powerful group within the Indonesian ruling class is the officer corps of the Army. It is the Army leadership together with other components of the ruling class (key bureaucrats and entrepreneurs) who benefit most from the integration strategy of 'development l But it is the army which orders society in such a way as to guarantee that their interests continue to be served.

The Arm_y's SeImage Since the struggle for independence during which the Army came into being, it has experienced political engagements with various political groupings involving a continual redefinition and clarification of its relationship with the state. In the course of these processes, the Army has acquired a well worked-out

picture of itself and its mission? An important claim in this ideology is that the Army, born of the Indonesian revolution, is an Army of the people, inseparable t o m the people. To demonstrate that it is the Saviour of the nation and has defended the nation's integrity against: all threats, it points to its defeat of the la/Iuslim extremists in the Dar'ul Islam revolt, its quelling of the regional rebellions of the late fifties, and its two victories over the communists in 1948 and 1965-66.3 The Indonesian Army sees itself as quite different from other armies of the world, because it was never created as an instrument of the state, but was itself involved in the creation of the state. The Army claims to have played from its inception a role which transcended the purely military and The Arm_y: 'Staéiliser and Dynamiter'

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83

extended to all social, political and economic fields. It has therefore demanded special social rights as compared to other social groupings, claiming a historical right to maintain its varied role, and rejecting the principle of civilian control of the Army, which it implies would make it the lifeless tool of the government of the day.4 Since 1966, those doctrines which ascribe to the military an important non-military role have been further developed and codified. Whereas previously, in the era of Sukarnoist ideo-

logical orthodoxy, these were focused on the theme of con-

I

tinuing it volution', since 1966 the doctrines have been reoriented around the theme of'development'+--the ideological hallrnarllx of the New ._..._._,. The Army ideologues point to Indonesia's unsuccessful experiment with liberal democracy (1950-59) and to Sukarno's Guided Democracy era (1959-65) as demonstrations of the inadequacies of civilian modes of politics. Civilian-dominated politics, they say, have failed to give direction to the nation, civilians failed to develop Indonesia and they failed to give it stability. The Army, on the other hand, is free from the disabilities of civilians and in fact has many advantages. Because of the disciplined character omits organisation, its unity, its sense of purpose, its technology-because of its modernity far in advance of other organisations or groups it can act as a 'motor of developrnent'.5 Development, so the doctrine goes, can only be achieved on a base of stability, stability, in turn, depends on there being development. The Army insists that it alone can guarantee

ma

both development and stability. In this argument lies the

rationale for the Army's di-fungsi (dual-function), which is the doctrinal cornerstone of the Army's role in the New Order and which as such has been elaborated and built upon in Army seminars and discussions since 1966. The most common formulation of the argument is that insofar as the Indonesian Army has a military role (in addition to its external deface tasks) it is as the Stabiliserg insofar as it plays a role which, while inextricably linked to security, is not purely military in character, it is as the D9/namiser."

Political Repressiveness The Suharto regime certainly has brought stability to Indo84

[

Nature of the Indonesian Experiment

nesia, the last seven years have been characterised by a remarkable continuity of policy and top level personnel and an absence of any major challenges to the regime. In the words of General Panggabean, Deputy Commander of the Armed Forces • '

It was this achievement of natronat stability since 1966 which enabled the government to rntrodace the Five-Tear Reconstruction Plan (1969-73). The Indonesian Armed Forces realize that stabitéty is of vital importance to national reconstruction. The [ac/c thereof in ]950-65 has caused existing national reconstruction programs to be afartare. For this reason, the Indonesian Armed Forces wish to avoid and will never toferarto the recurrence of any social upheaval which may hamper the course

of nafzoaal toconttrwtion. 'r

The regime was founded in the midst of atrocious massacres in late 1965 and 1966, particularly in Java and Bali. Hundreds of thousands of people were killed in that period; tens of thousands more still remain as political prisoners, detained without any prospect of trial.** The stability which has flowed from the regime's consolidation has been achieved by an arrangement which in many respects resembles an army of occupation. The Indonesian Army learnt valuable lessons from its origins in the guerilla warfare of the 'rcvoIution', and from its long experience in counter-insurgency operations. It has also learnt valuable lessons from the experience of disunity within the armed f`orces,9 progressively evolving a structure which largely eliminates the problems of enforcing headquarters control over the regional armed forces units spread throughout

Indonesia. Thus, the centrally directed military machine has been able to assert an awesome scope and intensity 0? contro-1 over the population. Seventeen proviso&IIl...sIlmlml1:l regulate the activities of the Fighting fOrces located province, and control a highly centralised pyramidal structure of army administrative offices which parallels i n civilian regional, administrative structure.

In every town, and in some areas, in every village, there is an army presence with the ostensible task of 'maintaining security'. These local military posts eiiiectively supervise the activities of the civilian administrative apparatus and act to preserve political stability. . Thirdly, military men, of all ranks, active and retired, are The Army: 'Stabilizer and Dynarniser'

I 85

placed in all kinds of key non-military polos-as managers of state enterprises, administrative officials, village heads, functionaries in the various ministries, etc. In this way, a more or less closely co-ordinated network of army members controls at all levels the nominally civilian arenas of ministerial departments, local administration and industry. In addition to these

local control mechanisms, the Indonesian Army maintains highly-trained paratroop strike forces which are capable of reaching any part of the archipelago within 24 hours. Another institution of crucial importance to the defensive and czetioe (Policy), directed towards securing and protecting the national ports Ty eliminating all kinds of threats, challenges and obstacles," is an intelligence organisation, o p U s (Special Operations). As an intelligence unit, o p U s ' origins were as a righting shadow of Subandrio's BPI (Central Intelligence Body) in the late Guided Democracy period. It 'is led by a largely Javanese clique under Major-General Ali Murtopo, who have been closely associated with Suharto since he was commander of KOSrRAD (Army Strategic Reserve Command) immediately before 1965, and in the case of some, since he was commander of the Central Java Diponegoro Division in the l950's. This organisation specialises in manipulative operations with respect to political groups. It relies to a large extent on a host of civilian informers and the persuasive force of its finances.11 OPSUS

played a very important part in stage-managing and

directing the general elections in 1971. Since then, however, it has been rather eclipsed by yet another element of the Army's control apparatus, KOPKAMTIB (Command for the Restoration of Security and Order). KOPKAMTIB emerged in the martial law period following the attempted coup by the 30th September Movement in 1965. It has been retained together with its extraordinary powers, which are delegated to LAKSUS (Special Implementers) at each provincial Army command. X/Vhereas the methods of ops Us are informal manipulations, KOPKAMTIB (representing the political interests of the Department of Defence), uses the bludgeon of formal military

authority. It is

KOPKAMTIB

which forbids demonstrations,

arrests troublesome political figures, bans public discussions on sensitive topics, and censors the press. In charge of KOPKAMTIB is General Sumitro. It is he who has 86

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Nature

of the Indonesian Experiment

done more than any other individual to make the Indonesian Army into the sophisticated machine of oppression that it now is. It was Sumitro who in 1968 introduced structural reforms integrating all the armed forces under Army dominance and centralising power within the Army itself This has resulted in an unprecedented capacity to control all areas of social life through a centralised military bureaucracy. The scope and intensity of control exercised by the army over the people varies from province to province. But particularly in Java, the most populous, most densely populated area, with the most pressing problems of land tenure and rural poverty (and the area which provided the strongest support for Sukarno and for the Indonesian Communist Party) it resembles apermanentlymounted counter-insurgency operation.

Role in t/ze Economy The growth in the Army's repressive capacity, over the last fifteen years, but especially the last seven, has been accompanied by a growth iN its economic interests. McVey has shown how the emphasis on consolidation and expertise which followed the might for independence, and the establishment of business and marriage ties with local civilian elites in the early fifties militated against any revolutionary clan remaining within the Army." The expansion and consolidation of Army power was most marked during the two periods of martial law. The first was the period of the suppression of the regional rebellions and the introduction of Guided Democracy (1957-63). The military's expanded role after the proclamation of the State of

Emergency in 1957 meant that : Increasingly, oNe military functioned in a socially conservative irnanner. The direct role assumed by the army in the economy, anal particularly :Elie control over the Datclz-owned enterprises wlziclz it asszaned in late 1957, gave it a stake in the economic status quo and as appreciation of the problems of rnanagement corgfronzfecl by labor.4r's demands. Its Position in territorial government Pat army ojicers in a close working and social relations/iq; wills civilian elites, and it also enlzancecl their professional military tendency to value ora'er froin above ratlzer than srcescetzcefrorn below."

The second period of martial law (1966-70) followed in the wake of the 30th September la/loveInent. To a far greater extent

than in the earlier period it was characterised by an inward The Army: c»S`ta6£l2'ser and Dynamiter'

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87

r

consolidation of the Army through purges of undesirables and an outward expansion by irleursions into what were still largely civilian domains. As with the earlier period, the Army could further acquire and build upon its stake in the economy, through the acquisition of confiscated enterprises, this time primarily Chinese." The trends established during Guided Democracy by way of the growth of oilicers' interests as bureaucratic capitalists, have been remarkably accelerated since the 'triumpll' of 1966 and the inflow of large quantities of foreign capital. Some of the new business enterprises have been established from within the Army organisation, by logistics commands and a network of organisations providing 'welfare' for the families of the officer corps and the soldiery.15 Others have been set up by informal associations such as those of Army wives or veterans, closely linked to the Army. Still more are initiated by individual otiicers acting as investors, often with Chinese businessmen as their money rnanagers.1" Most of the 'Army' enterprises of any significance are 'joint ventures' with foreign capital. The co-operation of Indonesian military capitalists with Japanese capitalists in the exploitation of Kalimantan's timber resources is an outstanding example." Mlliether state owned or private, business enterprises are incre singly being controlled by bureaucratic capitalists, amongst whom the military men are inevitably the dominant group. A number of supposedly non-proht-making foundations such as the casar I-Iaarapan Kita or jajasan Dkarmabutera have become commercial and industrial empires, often wielding great financial power. jajasan Ifarapan Kita is a foundation headed by Madame Suharto together with the wives of other generals prominent in the President's clique, and controls a diverse range of service and productive industries. jajasan D/zarmaputera a foundation ostensibly providing welfare for the families of i