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The Future of Indonesia

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Merle Ricklefs seeks clues for the future of the troubled archipelago nation in its distant past.

There is much speculation, and not a little worry, about the future of Indonesia – the giant of Southeast Asia, the most populous Muslim-majority nation in the world, the world’s third-most-populous democracy, a nation which sits astride some highly strategic sea-lanes, and a place sometimes identified in the rhetoric of ‘war against terrorism’ as a potential source of al-Qaeda-linked, or al-Qaeda-type, terrorist movements. The most pressing question seems to be how – or whether – the nation can be held together. It seems that the government of Megawati Sukarnoputri (from July 2001 to the present), and certainly the Indonesian military, believe that the use of force to that end is justified and necessary, at least in the case of Aceh. Some military leaders see the broader American-led ‘war against terrorism’ as an opportunity to re-establish the military as the predominant political force in the nation.

Indonesia consists of the world’s largest archipelago. Running it as a centralised administrative unit would be an immense challenge for any government, let alone one with as many problems as that of President Megawati. So what might the future hold? Will Indonesia fall apart?

Concern about Indonesian unity commonly rests upon a view of its history which is too short-term. Most observers have in mind the Soeharto years (1966-98). All are aware of the extravagant corruption of President Soeharto, his family and his cronies. The regime’s human rights abuses earned it an international reputation for brutality and for an inability to recognise its own long-term self-interests. This was a regime which was often stupid, brutal and corrupt. Yet it also achieved remarkable economic development and, until the crash of 1997, most of Indonesia’s citizens benefited as did many foreign investors. In the context of the Cold War and in the wake of the Iranian revolution of 1979, Indonesia seemed to the United States to be a nation which, while remaining non-aligned, was nevertheless non-aligned in ways the West found helpful. The regime was anti-Communist, seemed to have domesticated Islamic political forces, was open to capitalist investment, and was achieving high levels of growth.

The most promising period of the Soeharto regime was the late 1980s. By that time economic development was achieving impressive results. Health, education and welfare standards were rising significantly. Corruption was bad but perhaps not  dysfunctional. There was a rapidly growing urban middle class and signs of political openness from time to time. The country was not yet seriously challenged by separatist sentiments, religious radicalism or inter-ethnic conflict. There was plenty that was wrong by the standards of universal human rights, transparency and honesty, but it would not have been unreasonable to think that there was a real chance that things could get better. Indonesia might evolve into a middle-income, ‘soft authoritarian’ or maybe even nascently democratic state, unified, stable, and friendly to the West and to its economic and strategic interests. It may well be this idea, or something like it, that President Megawati has in mind today.

But the centralising model of the Soeharto regime has been discredited in the eyes of a large proportion of Indonesians. Too much freedom was lost, too many corruption became obvious, too much of its forests fell to regime cronies, too much blood was shed, too much brutality was suffered. Above all, the administrative capacity of the bureaucracy, the resources of the military and the general capacity of the government to govern are all far too limited to run Indonesia as an administratively unified state.

It is probable that there is no going back to the late 1980s. However, a longer-term look at Indonesia’s history suggests a different sort of future might be possible. 

Looking at the archipelago in the period 1400 to 1800 reveals some distinctive factors. These give the area a distinct identity and continuity which enables us to speak meaningfully of the history of the Malay-Indonesian region as an entity. It used to be said that colonial regimes created the modern states of Indonesia and Malaysia, and there is some truth in that. But the Dutch and British colonial empires broke continuities, too.

The boundaries of this cultural, political and economic continuity were different from modern national ones. The Malay peninsula and Borneo were part of it, and the southern Philippines was at its outer fringes. Papua was not in this world, except for peripheral trading contacts.

This was a maritime world. Seas were not, as in modern states, where lines were drawn to divide polities, but highways that connected polities with each other. Trading towns of east Sumatra had more to do with the other side of the Malacca Straits (in modern Malaysia) than with the  remote interior of Sumatra. North Java coastal states were linked to places across the Java Sea in south Kalimantan and resisted attempts to control them on the part of the interior empires of Java itself. Much of the commerce of the great Malay trading state of Malacca, which prospered during the fifteenth century, depended on the seaborne import of the spices of Maluku, the rice of Java and the slaves of the eastern archipelago.

Trade was thus important in linking these places. The astute Portuguese apothecary Tomé Pires, who was in Malacca in 1512-15, shortly after its conquest by the Portuguese in 1511, visited Sumatra and Java and recorded information from across the archipelago. His Suma Oriental described a vast seaborne trade system which handled bulk items like rice, textiles and slaves, but also high-value, low-bulk products such as spices, gold, benzoin, honey, rosewater, wax, rattan, sandalwood and diamonds. These products circulated around the archipelago on the basis of natural comparative advantages. This Malay-Indonesian network was connected, principally at Malacca, to wider international networks which traded Indian textiles, Chinese goods, and much else from as far afield as Europe.

Cultural continuities also connected the archipelago’s population centres. Islam provided a shared reference, networks of books, teachers, laws and ideas; and the powerful experience for some of the hajj, the pilgrimage to Mecca. The mystical Sufis were important in spreading ideas and commitment to Islam. Some major Sufi works written in early seventeenth-century Aceh spread across the archipelago, in Malay and in local translations. This was, at least until the late seventeenth and eighteenth centuries, not a puritanical or reformist faith. But there were certainly people for whom Islam was a moral imperative and banner of political action: Sultan Alauddin who Islamised South Sulawesi by force of arms in 1608-11; Shaikh Yusuf Makasar who resisted the Dutch East India Company’s intervention in West Java in the 1680s; Trunajaya of Madura who toppled a king of Java in 1677; Kyai Tapa who inspired a Bantenese rebellion in 1750 and prince Dipanagara who led the last great Javanese resistance against Dutch rule in 1825-30, known as the Java War.

Although Hindu Bali did not convert to Islam, it was part of this archipelagic continuity because of its intimate connections with Java and Javanese culture. Until the late eighteenth century, Balinese were involved in the turbulent politics and complex cultural transitions of the easternmost extremity of Java. And Balinese products, not least slaves, were an important element of the trading system.

When Malay-Indonesian kingdoms went to war or made peace, they did it with their fellows within this vast archipelagic community. The sultans of what is now Malaysia rarely battled the rulers of Siam or Burma; their alliances and conflicts were with peoples from Aceh to east Indonesia. The Bugis and Makasarese of Sulawesi traded widely, but their political and trade heartland was the Malay-Indonesian archipelago. When a Javanese king had imperial pretensions, it was to other states in the archipelago that he turned for tokens of obeisance – which they, under most circumstances, refused to give.

In all of these states, the forms of government were pre-modern, with low levels of institutionalisation. The state whose form of governance is best known is the Mataram empire of central and east Java, which was founded in the late sixteenth century and whose descendants still occupy the courts of central Java today. Here we see irregular processes for collecting taxes and levying manpower for public works or war. Such low levels of institutionalisation were in part necessitated by the difficult facts of geography. Java now has a population of over 100 million, but its population around 1800 was probably no more than 3-4 million. Vast tracts were unpopulated, roads were extensive, but easy for brigands or local overlords to cut or tax, and often impassable in the wet season. Smart Javanese kings recognised that they needed alliances with local lords (which meant making sure they shared in the rewards of loyalty), a cultural position which made the monarchy appear to be supported by supernatural powers, military success whenever challenged, and, of course, lots of spies and poisoners. What was true of Java was true of the entire archipelago. It was not run like a modern state.

Thus, there was continuity in the  area before the high colonial period of the nineteenth and earlier twentieth centuries, but it did not rest upon administrative unity. Rather, it rested upon a shared sense of cultural community, shared histories of interaction, and above all on shared trade links. This trade provided the solid ties of mutual benefit that knitted the archipelago together. The Malay-Indonesian archipelago was not a nation, but it had something that looked like a nascent national economy, with comparative advantage and mutual benefit making it sensible for the region to work together. It was not unlike the European Union: it even had its parallel to the Euro the Spanish (Mexican) Real , the silver ‘piece of eight’, which was the common unit of exchange throughout the region. The coming of the northern Europeans in the seventeenth century soon changed that.

What the Dutch and British colonial powers did in the nineteenth and twentieth centuries was to break  the continuity of the region even as they worked for administrative centralisation of their colonial territories. They did this firstly by separating the two sides of the Straits of Malacca into different spheres of interest in the Treaty of London of 1824. Then, the Dutch sought to make the archipelago an administrative unit by conquest. Finally, they broke up the economic continuities of their new colonial state by redirecting its economies towards export destinations outside of Indonesia. At independence in 1949, Indonesia was an administrative unit, but no longer an economic one.

The administrative and political unification of what is now Indonesia began under the Napoleonic governor-general H.W. Daendels (1808-11), who sought to make Java a real colonial territory, governed from Batavia. The interim British administration that followed (1811-16) intervened in the affairs of the Javanese courts in the name of bringing to heel what it regarded as a corrupt ancien régime . This newly interventionist approach precipitated the Java War (1825-30) which, in the end and not without difficulty, the colonial forces won. Thereafter Java became truly a Dutch colony, with its resources developed for the benefit of the mother country. Java’s sugar, coffee, tea and other products helped to make Amsterdam one of the world’s great markets for colonial produce, paid off the Netherlands’ national debt, kept Dutch domestic taxes down, built the Dutch state railway system and did much to stimulate the industrialisation of the Netherlands in the course of the nineteenth century. Java’s trade, once a part of networks involving Sumatra, southern Malaya, south Kalimantan, Bali and east Indonesia, was now to a great extent focused on Amsterdam.

The Dutch had initial misgivings about expansion into the outer islands (except for Sumatra) but, in the more intensive imperial scramble for territory of the later nineteenth century, felt that they had to move to prevent other European powers or Americans from becoming established there. This meant a series of costly wars: in south Sumatra (1819-1907), west Sumatra (1821-38), Bali (1840s, 1906-8), Lombok (1894), south Sulawesi (1858-60, 1905-6), Kalimantan (1859-63) and elsewhere. This process of conquest culminated in the Aceh War, which began with the defeat of the first Dutch expeditionary force in 1873. The war went on for four decades, with significant resistance continuing until 1910-12 – the longest colonial war in history.

As the Netherlands colonial state was being brought together by force, it was being unified by the KPM shipping line. The KPM brought people, products and mail from one part of the archipelago to another, with everything in the end centralised around Batavia (modern Jakarta).

The products which now developed most dramatically were those needed by an industrialising and modernising world, such as petroleum and rubber, tobacco, sugar, coffee, tea, copra, tin and quinine. The new products of the archipelago were mainly directed to international, not Indonesian, markets. By 1914, the ratio of inter-island trade to foreign trade was only 5.5 per cent, 10 per cent in 1921, 17 per cent in 1939. The outer islands now became more important than Java as sources of exports to international markets.

With the Netherlands East Indies fully established by the 1910s – except for remote areas like Papua, barely controlled even by the time of the Second World War – there occurred a degree of administrative unity never before witnessed in the history of the archipelago. It is this which justifies the claim that the modern state of Indonesia was created by the Dutch. But the economic continuities that had once knitted the archipelago together had been broken.

After five years of revolution beginning in 1945, Indonesia’s independence was conceded by the Dutch in 1949. Now Indonesia’s political elite had to decide how they were going to run their new country. Not surprisingly, they shared the assumptions of the Dutch regime under which they had lived, the conventional political orthodoxies of Europe and America, and a commitment to democracy as an abstract idea (although their social and educational backgrounds made them elitists at heart). During the revolution, the Dutch, crucially, had sought to counter the unitary Republic of Indonesia by setting up sham independent states in territories they still controlled so as to create a federal Indonesia in which Dutch influence would remain strong. In December 1949 a federal Republic of the United States of Indonesia was indeed created by the Round Table Conference which brought the Indonesian Revolution to an end, but this Dutch attempt at continuing influence had the effect of discrediting federalism in the eyes of nationalists. Within eight months the federal states were all gone, collapsed into the unitary Republic.

Through the 1950s, governments came and went with alarming rapidity. Administratively they proved inadequate. The bureaucracy was highly politicised and became for the most part a bloated, incompetent and corrupt cancer on the nation. The military was involved in various political ploys, rather poorly, in the earlier 1950s, resulting in it being under-funded, under-trained, ill-equipped and divided. An Islamic rebellion, the Darul Islam movement, had begun in West Java in 1948, even before independence, and even here, in the hinterlands of Jakarta, the army had difficulty in re-establishing control. By late 1956 military commands in the islands outside of Java themselves were setting up regional councils (i.e. carrying out regional coups) –  financed in part by the proceeds from smuggling local products to markets outside of the country. Political parties hardly had national electoral bases at all. There were no national elections until 1955 and most parties concentrated on the only game in town: dividing up the spoils in Jakarta.

Cultural unification was a greater success. President Sukarno (1945-66) hammered the theme of national unity incessantly, and struck responsive chords. The national Indonesian language was a powerful tool in this respect. It was adopted throughout the national educational system and in the media. Nevertheless, it remained a minority language; as late as 1971 only 40.8 per cent of Indonesians were literate in the national language. However, the idea that Indonesians were members of a single nation nevertheless was beginning to take root.

The forces of disunity were still powerful. Among the regionally based rebellions the most important was the Sumatra-based PRRI (Pemerintah Revolusioner Republik Indonesia , Revolutionary Government of the Republic of Indonesia) rebellion of 1958, which was crushed quickly, and rather surprisingly, by Indonesian military combined operations. Yet this was not a Sumatran breakaway movement, but an attempt to change the government in Jakarta. Even these regional rebellions took place in a context which assumed that Indonesia was a single state.

Sukarno sought to enhance this national unity and to crush his political opponents by building a sense of ongoing revolution. Both the military and the Communist Party saw advantages in this and played along. Thus was ushered in the chaos of Sukarno’s Guided Democracy government, a teetering house of cards which finally collapsed in the failed coup of 1965 and the bloody anti-Communist violence that followed, in which between 300,000 and 2 million people were murdered and over 100,000 taken political prisoner without trial.

From this bloodshed came Soeharto’s so-called New Order government. Now the national unity project was pursued by putting trusted military men in crucial governmental positions and trusted military units in places which were, or might become, troublesome. Already by 1968 seventeen of Indonesia’s twenty-five provincial governors and over half of itsbupatis (regency heads) and town mayors were military men. If it was necessary to apply violence, there was no hesitation in doing so. The new presidency was born in violence and remained, at heart, a military regime, working with a depoliticised national bureaucracy. And so the politics of the New Order became largely the politics of Soeharto himself and of the military.

If Soeharto could be seen to follow the agenda of his colonial predecessors in maintaining the unity of the archipelago by force, his regime departed from the past in its economic programme. Its first task was to stabilise and rehabilitate the economy. Having achieved this within the first five years, the regime’s technocrats turned their efforts towards development.

The revolution in oil prices of the 1970s not only gave Indonesia vital resources for development, but also made possible a degree of economic nationalism. From the mid-1970s  real local industrial and business growth occurred. Java now experienced what Howard Dick calls ‘a belated industrial revolution based on the resource of cheap labour’.

By the time the Soeharto regime fell in 1998 real progress had been made towards creating a national economy, for the first time in nearly two centuries. Various parts of Indonesia were again being tied to each other, rather than to overseas markets, principally because of the development of manufacturing industry in West Java. Now raw materials for that industry were being drawn from the outer islands and the products of that industry were being sold throughout the archipelago (as well as in overseas markets). Indonesia was again becoming an area tied together by economic advantages and self-interest.

The history of the past two centuries suggests that unifying the  archipelago administratively can only be done by the use of force. Despite all the developments in communications and other technologies over this period, only compulsion has produced administrative unity. Once the capacity of the Soeharto regime to enforce unity collapsed, anti-Jakarta sentiments bubbled up in many places. In East Timor these have ended in the independence of the area. In Papua there are demands for independence. Throughout the country there is an insistence on greater autonomy from Jakarta. In strife-torn, tragic Aceh a historical sense of déjà vu may be prompted by the thought that the Indonesian military has been fighting to crush the local independence movement for well over a decade already.

Indonesia is now tenuously unified in administrative terms. From 2002, a policy of regional autonomy  has been implemented. No one dares call it federalism, but that is what it looks like. The problem for Indonesian policy circles is that the Dutch having discredited federalism and Soeharto having discredited centralisation, there are few middle options to choose. The critics of Megawati Sukarnoputri suspect that she wishes to roll back regional autonomy, being inspired by her father Sukarno’s calls for national unity but far more inclined to embrace Soeharto’s use of force to achieve it than her father’s style of revolution.

Comparison with the colonial and earlier independence periods suggests that administrative unity is unlikely without force, while present social and political realities suggest that force is unlikely to be acceptable to most Indonesians. Therefore any government recourse to force might tear the country apart. Indeed, military force has already done much to destroy Acehnese allegiance to the nation.

In the pre-colonial period, however, Indonesian continuities were products of cultural and economic connections, and of political interaction between autonomous polities, and these continuities are now stronger than they have ever been.  Indonesia is now a much more uniformly Islamic country than it was even forty years ago. Ongoing Islamisation has dramatically reduced opposition to Islamic values and norms. Throughout the country are thousands of Islamic schools, many – but certainly not all – of which support the tolerant pluralism which Indonesian religious elites have generally embraced. Notably, there is a widespread network of the State Islamic University in Jakarta and the State Islamic Religious Institutes, university-level establishments which form a powerful institutional base for the liberal, tolerant Islam for which Indonesia is well known. The two largest Islamic organisations, Muhammadiyah and Nahdlatul Ulama, have vast educational networks, a dominant philosophy of liberalism and openness, and something like 60 million followers between them.

The sense of Indonesianness is strong. By 1980 61.4 per cent of Indonesians were literate in the national language and the 1990 census reported the figure to be over 80 per cent for Indonesians above the age of five. Three generations of Indonesians have got used to the idea that their nation is something to be proud of. Although Soeharto did much to discredit major symbols such as the national (Sukarnoist) philosophy of Pancasila (Five Principles), nevertheless in most of the country the sense of being Indonesian seems still to matter.

It now makes sense for the various parts of Indonesia to work together as an economic entity, employing comparative advantages to mutual benefit. Reverting to the European comparison, Indonesia not only has the foundations for economic co-operation and a common currency, but things the European Union still lacks: common laws, a common foreign and defence policy, and a common language.

This review of the archipelago’s history suggests that those with an interest in Indonesia’s future might do well to consider how the archipelago functioned in the 1480s. They might then do everything possible to encourage economic interdependence and order the military to limit its role to the defence of the archipelago from external threats. That is, sell Aceh’s energy resources to Java, sell Java’s manufactures to Aceh, and send the military back to the barracks. This policy might marginally enhance the prospects of a peaceful settlement in Aceh. And it may point the way to a new kind of state in Indonesia.

For Further Reading:

  • M.C. Ricklefs, A History of Modern Indonesia since c. 1200 (3rd ed.; Palgrave; Stanford UP, 2001)
  • Howard Dick, Vincent J.H. Houben, J. Thomas Lindblad and Thee Kian Wie, The Emergence of a National Economy: An Economic History of Indonesia, 1800-2000 (Asian Studies Association of Australia in association with Allen & Unwin and University of Hawai’i Press, 2002)
  • Armando Cortesão (ed. & transl.), The Suma Oriental of Tomé Pires and the Book of Francisco Rodrigues (2 vols. Hakluyt Society, 1944)
  • Anne Booth, The Indonesian Economy in the Nineteenth and Twentieth Centuries: A History of Missed Opportunities (Macmillan in association with the Australian National University, Canberra, 1998).

M.C. Ricklefs is Professor of Asian Studies in the University of Melbourne and Director of the Melbourne Institute of Asian Languages and Societies.



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