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350 Years of Colonialism

Until the 1965 coup, Indonesia was one of the most dynamic leftward-moving countries in the non-socialist world. The Sukarno government took a number of bold steps in foreign policy that shocked the Western capitals and threatened to be infectious. Indonesia withdrew from both the UN and the Olympic games, declaring them to be dominated by imperialism, and started to set up rival international bodies. At the very moment that the right-wing coup was taking place, a conference against foreign military bases, which of course was aimed first and foremost at the U.S. with its 3,000 installations overseas, was in session in Djakarta.

These moves came at the urging and insistence of the masses, who were organized and highly class conscious. The PKI had three million members, and mass organizations that were influenced by the Communists encompassed some 20 million persons. Again and again, in bold militant street actions, the people demonstrated their opposition to imperialism in front of the U.S. mission in Djakarta and other large cities. From the beginning of 1965, workers in the oil and rubber properties owned by U.S. corporations began expropriating these holdings and putting them under workers' control.

The Indonesian people had every reason to fear foreign domination. Like the Vietnamese, they saw in recent years that the freedom they thought they had won from European colonialism was eroding away as U.S. businesses tightened their control on the economy and the American military presence became more obvious.

The idea of enduring another siege of economic oppression was unbearable to them. For of all the countries, outside of Africa, that had suffered from colonialism, Indonesia was without a doubt plundered the most ferociously. When the Indonesian masses finally were able to declare their political independence, the rich archipelago was one of the most impoverished areas on earth.


Reba Lewis, author ofIndonesia: Troubled Paradise, tells how when she and her husband, a doctor with the World Health Organization, decided to move to Indonesia in 1957 from his post in India, there was only one doctor for every 60,000 people. In India, which was itself a land full of beggars, struggling to emerge from the yoke of colonialism, there was at this time one doctor for every 6,000 people.

InWestern Enterprise in Indonesia and Malaya, a British economic history by no means sympathetic to the Indonesian revolution or its national aspirations, authors G.C. Allan and Audrey Donnithorne remark, "In 1940 only 240 Indonesian students graduated from the high schools and only 37 from the colleges. In that year out of over 3,000 higher civil servants there were only 221 Indonesians, and even in the middle ranks a larger number of posts were held by Europeans and Eurasians, who counted as Dutch."

By 1945, Mrs. Lewis tells us, 93 per cent of the people were still illiterate. After 350 years of colonial domination, there were only a hundred Indonesian physicians; less than a hundred Indonesian engineers; and in a nation dependent upon the efficiency of its land productivity, only ten Indonesian agricultural experts.

We have been told ad nauseam by the bourgeois press that Indonesia's economy, crippled by inflation and barely able to keep pace with the population growth, got that way because of Sukarno's extravagance in building sports palaces, mass auditoriums, and playing host to various congresses of Afro-Asian peoples. But the figures just quoted on the heritage of colonialism, and the following information, tell a different story.


During the long period of colonial rule, the Indonesian economy fell more completely under the control of the -- the Dutch, and for a brief period the British -- than almost any other territory. Unlike China and Japan, where the European powers imposed their will mainly through commerce, the Indonesian economy was taken over and completely reorganized.

Vast estates were established by the Dutch East India Company, later to be held under the direct control of the Dutch crown. What had begun as the spice trade under early Portuguese merchants soon became a diversified system of agriculture. Many new crops in demand on the world market were introduced into Indonesia. Coffee, tea, sugar, indigo and spices became major exports, but instead of being produced by individual small farmers, they were cultivated on huge estates, mainly on Java.

Changing conditions in Europe deeply affected Indonesia's development; indeed, the destiny of the Indonesian people was completely in the hands of the men making decisions in the European capitals. In periods of crisis in Europe, the tempo of production in Indonesia declined sharply. Even in those days, when months of long sea voyages separated areas on opposite sides of the earth, the thin line of Dutch and British trading vessels plowing the waters between kept a stranglehold on Indonesian life.

When Britain occupied the Dutch settlements on Indonesia in 1811, and held them for five years under the governorship of Stamford Raffles, it was because Holland had moved into the French orbit during the Napoleonic Wars.

In this brief period of British control, the Dutch crown's monopoly over exploitation of Indonesia, which had already suffered a mortal blow with the demise of the Dutch East India Company in 1800, was brought to a decisive end. Raffles, who in effect introduced an "Open Door" policy in Indonesia, made certain reforms under the name of "economic liberalism" which, in his own words, were a prescription "by the establishment of a free and unrestricted commercial intercourse to draw forth their resources while we improve our own."

The Treaty of London, concluded between Britain and Holland in 1824, gave the former the Malayan Peninsula and assured the continuation of Dutch rule over Indonesia. But the British lion already had his paw well into the opened door, and both powers from then on intensified their exploitation of the Indonesian people and land.


Perhaps this is the place to pause for a minute and take a look at America's historical interest in Indonesia.

The U.S. became involved in Indonesia, which was then the Netherlands East Indies, both economically and strategically in the early 1900s. At the turn of the century, the Standard Oil Company tried to penetrate the monopoly on Indonesian oil held by Royal Dutch. Royal Dutch's Indonesian wells had enabled it to cut into some of Standard's Asian markets. In return, the U.S. giant started a price war against Royal Dutch that nearly put the company out of business.

The merger of Royal Dutch with Shell in 1907 saved these Dutch and British concerns from going under financially, but they could not keep Standard out of Indonesia much longer, and in 1912 Rockefeller was permitted to form an Indonesian subsidiary, which began mining oil in Central Java in 1914. It was to the great advantage of the powerful U.S. corporation that both Britain and Holland were preoccupied in the war raging across the European continent at the time, and could no longer afford to fight the incursions of their main rival.

World War I also provided the opportunity for the U.S. to move into rubber production in Indonesia. Like oil, rubber had been exclusively produced by Dutch and British concerns, which had alternated as colonial powers in this part of the world for some three hundred years. But the decline of European capital, that became so dramatically apparent with the outbreak of the war, and the colossal rise of the new young industrial giant across the Atlantic, meant an end to their imperial monopolies once and for all.

By 1914, Goodyear Tire and Rubber had already opened estates in Sumatra, and the U.S. Rubber Company, through its subsidiary the Holland-Amerika Plantege Mij., had acquired 80,000 acres of land suitable for rubber production. This move brought the largest rubber estates in the world under a single ownership.

During the postwar period and then the Depression, the holdings of U.S. companies in Indonesia were expanded and consolidated.

By the 1930s U.S. imperialism had already developed a global appetite, and the coming bloody clash with Japan for hegemony in the Pacific was in the making. The Second World War was to mark the end of the centuries-old European colonial regimes, especially in the Far East, but both Japan and the U.S. looked on a war in Asia as the opportunity for opening up new empires.


Indonesia, with a population at the time of around 80 million and natural resources ranked fifth in the world, was no small prize in the struggle. While both Japan and the U.S. had their sights fixed primarily on China, the memorable battles fought in the South Pacific that proved so costly in American and Japanese lives show the great strategic and economic importance attached to this area even then.

Shortly after the war it became clear that the Chinese Revolution had irreversibly removed that Asian giant from the capitalist market. The U.S., no doubt feeling its defeat of Japan somewhat a Pyrrhic victory when the major prize remained unattainable, was forced to shift its attention elsewhere.

Southeast Asia, both as the gateway to the Indian Ocean and as an area rich in valuable materials, emerged as a primary target in Washington's global strategy. U.S. support for the French counter-revolutionary war in Indochina began pouring in, until by the time of the French defeat at Dien Bien Phu, American dollars and supplies were paying for 80 per cent of the war.

To students of the Viet Nam War, much of this is now well known. But what has been largely neglected is the role that Indonesia's riches played in shaping the Eisenhower Administration's thinking in this crucial period.

It may be remembered that in his oft-quoted remarks to the Governors' Conference in 1953, when Eisenhower was explaining to these business-minded politicians why it was to the advantage of the U.S. to pay for the French war, it was the "rich empire of Indonesia" that lay at the crux of the matter.

Now let us assume that we lose Indochina. If Indochina goes, several things happen right away. The Malay peninsula, the last little bit of land hanging on down there, would be scarcely defensible. The tin and tungsten we so greatly value from that area would cease coming, but all India would be outflanked.

Burma would be in no position for defense.... All of that position around there is very ominous to the United States, because finally if we lost all that, how would the free world hold the rich empire of Indonesia?

So you see, somewhere along the line, this must be blocked and it must be blocked now, and that is what we are trying to do.

So when the U.S. votes $400 million to help that war [in Indochina], we are not voting a giveaway program. We are voting for the cheapest way that we can prevent the occurrence of something that would be of a most terrible significance in the United States of America, our security, our power and ability to get certain things we need from the riches of the Indonesian territory and from Southeast Asia.


In the period before World War II, the major obstacle to further expansion of U.S. economic interests in Indonesia was the tight control of the Dutch overlords. American corporations fought Dutch groups in international price wars, etc. and most often the superior industrial and marketing capability of firms like Standard Oil gave the U.S. the upper hand. But Wall Street was held back in any efforts to make a massive push into Asia at that time by the fact that the area as a whole was still held tightly by the European colonial powers -- although in growing competition with Japan.

After the war, the situation was entirely different. The once proud empires of Europe were licking their wounds, entirely dependent upon handouts from the U.S., which had emerged from the war unscathed. Revolutionary resistance movements that had taken up arms against the Axis powers threatened the European "democracies," both in the colonies and at home -- the ruling classes had everything they could do to prevent their own overthrow. It was no time to raise and equip an expeditionary force.

This is not to say that, even then, they didn't try. The French sent troops to Indochina, the Dutch tried to force the Indonesian people to submit once again, and British soldiers went into Malaya to crush the people's movement. But in every case, these imperialist powers were only shadows of their former selves, dependent for their stability at home on the Marshall Plan, and relying on the U.S. to foot a growing amount of the military bill for these foreign adventures.

Was Washington altruistically helping its allies regain their former possessions, or did it have something else in mind?

The course of the 20-year Viet Nam War should clear up all doubts on this score. As Eisenhower so candidly admitted, the U.S. took over a larger and larger share of the expenses of these counter-revolutionary wars because its own interests were at stake. It hoped to see Britain, France and Holland take on the brunt of smashing the national liberation movements. Then, when both sides were exhausted, the U.S. would move in and finish the job -- administering over the withdrawal of the expeditionary troops, as in Viet Nam, while laying the basis for its own accession to the position of foreign overlord.


That Washington underestimated the strength of the Vietnamese popular forces is now well known. But what happened in Indonesia in this postwar period?

With the defeat of the Japanese, power in Indonesia was in the hands of the nationalist forces. On August 17, 1945, Sukarno proclaimed the Republic of Indonesia, claiming at last the independence that the people had fought so long for. From a revolutionary point of view, the Dutch had never had any right to rule the people of Indonesia. But now, even from a legal point of view, the Dutch, by surrendering to the Japanese in 1942, had in effect forfeited any claim to Indonesia. Great bitterness existed among the Indonesians, who felt that the Dutch had allowed the Japanese imperialists to take over without a fight rather than arm the Indonesian people.

But the Dutch in 1945 were not so willing to give back Indonesia to its own people as they had been to make a deal with Japan. For four years, intermittent warfare was waged as the Dutch made a last effort to reconquer their former colony.

When the Japanese surrendered, the Dutch had no troops in Southeast Asia. They frantically ordered that Indonesia be kept under Japanese command until the British could get there. On the arrival of Lord Mountbatten, he also instructed the Japanese not to hand over any administrative functions to the newly proclaimed Republic, and soon the British were using Japanese troops in combat against the Indonesian patriots.

This situation provoked widespread protest throughout Asia, and even in Australia the dock workers refused to load any munitions that might be used against the Indonesians.

In November 1946, the Dutch signed the Lenggadjati Agreement, recognizing the de facto authority of the Republic over Java, Madura and Sumatra and agreeing that Dutch and Allied troops should gradually be evacuated. It also stipulated that by January 1, 1949, a United States of Indonesia encompassing all the islands of the archipelago was to come into existence.

However, from the moment of signing this agreement, the Dutch worked feverishly to destroy the Republic. They started to set up puppet states under various feudal lords, at first on the outer islands but eventually in the territory they had supposedly recognized as free. They also continued a blockade of Java, and most important, began to build up, rather than phase out, their troop strength.

By May 1947, there were 110,000 Dutch soldiers stationed within the Republic. At midnight on May 27th, they struck against the Indonesian armed forces. While they used bombers, cannons and tanks against the ill-armed Indonesian troops, they called the defensive measures of these people fighting for independence "atrocities."

The Indonesians had expected an American occupation when the war was over, and believed so firmly in the U.S. as a "liberator" that they patterned their first statement of freedom after the U.S. Declaration of Independence. To welcome the U.S. troops that never arrived, they hung out posters containing quotations from the Declaration of Independence and Lincoln's Gettysburg Address. Even after they saw that they would have to fight the combined forces of the Dutch and British, who were using Japanese troops, they still believed that U.S. intervention would help them gain their freedom. Sukarno made a radio appeal to the U.S. to be an arbiter in the fall of 1945, but there was no answer from Washington.

Still hoping for help, a group of Indonesian women even set out for the United States to appeal to the Daughters of the American Revolution, thinking these ladies would understand their revolution! But disillusionment was not long in coming.

The U.S. strategy was to avoid a definite victory on either side, hoping to draw out the struggle until both Holland and the Republican forces were worn out. When the Dutch first moved to destroy the Republic and build back their own strength in Indonesia, the U.S. turned its back to any appeals for help from Sukarno. But later, as the Dutch military position improved and it seemed that they had a chance of reinstituting colonial rule, the U.S. moved to work out a compromise. In January 1948, a new agreement between the Netherlands and the Republic was signed on board the U.S.S. Renville. The Renville Agreement legitimized the recent conquests of the Dutch, who by now controlled half the sugar mills in Java, 75 per cent of its rubber, 65 per cent of its coffee, 90 per cent of the tea and the rich oil fields of Sumatra.

This temporizing agreement, presided over by the U.S., lasted less than a year. In the meantime, the Dutch strove feverishly to set up more puppet states and continued their military build-up. But the movement for independence was also growing, and by the end of the year the Dutch felt compelled to make a do-or-die move.

In a lightning attack on December 19, Dutch paratroops seized the Republican capital at Jogjakarta, capturing Sukarno and other government leaders. It appeared the Republic was doomed.

However, the real strength of the independence movement lay not in Jogjakarta but in the countless hamlets and towns throughout the archipelago where armed guerrillas had been organized. The attack had completely exposed the Dutch intention to restore their colonial stranglehold. Their puppet states lost any control over the masses, and the net effect of the blitzkrieg was to weaken the overall Dutch position even more. Within six months, the Dutch were forced to restore the Republican government and enter into a series of negotiations which culminated in final independence.


The Dutch formally relinquished their colonial status at the Round Table Conference at The Hague in 1949. They did not do so, however, without exacting some very serious concessions from the Indonesian government, whose Prime Minister at the time was the reactionary Mohammed Hatta -- later to become an outright enemy of Sukarno and leader of the CIA-backed secessionist movement in 1958.

Hatta agreed to the restoration of "broad avenues of [Dutch] economic power over Indonesia, such as rights, concessions and licenses for the operation of existing and new enterprises and estates. Furthermore, the Indonesian Government was forced to take over the debts of the Netherlands East Indies Government, which amounted to more than a billion dollars, and which, in effect, meant that the Indonesians were paying for the Dutch military attack which had been launched against them." [Indonesia: Troubled Paradise, p. 95] In 1950, Indonesia finally abrogated this deal and tried to make further steps toward real sovereignty, although these outrageous concessions to the Dutch had already helped to further weaken its terribly crippled economy.

It was at the Round Table Conference in 1949 that the first inkling could be seen of the role that the U.S. would later play in Indonesia's politics. At the urging of the U.S. representative, Indonesia reluctantly agreed that the status of Irian Barat, the huge western portion of the island of New Guinea, would be held in abeyance for the time being, to be settled by negotiations within a couple of years.

Irian Barat, or West Irian, was one of the territories held by the Dutch for hundreds of years as part of the Netherlands East Indies. Although sparsely populated, its spectacular scenery and huge area (largely unexplored even to the present day) is suspected to contain vast resources of mineral wealth. The tremendous chain known as the Owen Stanley Mountains, containing peaks of over 15,000 feet rising within sight of the sea, is a geological formation that has already attracted the attention of prospectors for several U.S. mining concerns, while other U.S. firms are drilling for offshore oil.

The Dutch continued to maintain control over this part of Indonesia until 1962, when Irian Barat was taken over by a United Nations administration. The U.S., first at The Hague in 1949 and again in the early sixties, "mediated" the dispute in a way calculated to weaken the Indonesian government.

Theodore Sorensen, in his book,Kennedy, touches briefly but revealingly on the U.S. role as mediator in this conflict:

. . . A temporary success of sorts was registered in 1962 in the territory of West New Guinea, the subject of a bitter dispute be- tween the Netherlands and Indonesia. To avoid a war which the Dutch had no desire to fight and which the Indonesians had every intention of winning with massive Soviet backing -- and to strengthen the position of the Indonesian moderates, the only hope against an ultimate Communist takeover in that country -- Kennedy made available the brilliant diplomatic services of Ambassador Ellsworth Bunker as a UN mediator. [p. 580]

The word "moderates" can be changed to read "fascist butchers," since the forces the U.S. hoped to bolster have now revealed their true character. And the "brilliant" Ellsworth Bunker is now known to the world as the man who presided over the U.S. occupation of the Dominican Republic and, as Ambassador to South Viet Nam, is presently making a last-ditch effort to prevent the Vietnamese liberation forces from finally wresting their country out of the hands of foreign imperialists.

More light on the U.S. "mediation" of this question is shed in Arthur Schlesinger's biography of Kennedy, A Thousand Days.

. . . The President regarded Indonesia, this country of a hundred million people, so rich in oil, tin and rubber, as one of the potentially significant nations of Asia. He was anxious to slow up its drift toward the communist bloc; he knew that Sukarno was already turning to Moscow to get the military equipment necessary for invasion. And he was also anxious to strengthen the anti-communist forces, especially in the army.... He was therefore immediately responsive when Robert Komer proposed that the United States take the initiative in trying to settle the West New Guinea argument before it blew up into a crisis. [p. 533]


And who is Robert Komer? Just a leading CIA agent, who ran the notorious pacification program in Viet Nam. His recent appointment to be Ambassador to Turkey touched off riotous demonstrations there, while the Turkish press dubbed him "Robert the Butcher."

Schlesinger also, in agreement with Sorensen, explains that Washington's motive for intervening was because they felt the Dutch could not win a war over West Irian. "The only alternative to [settlement] was war, and the President was sure that the Dutch, having declined to fight over Java and Sumatra, would hardly go to war over this last barren fragment of their Pacific empire."

In the spring of 1962, negotiations began in Middleburg, Virginia, between the Indonesians and the Dutch with Ellsworth Bunker "sitting in." After five months of talks, an agreement was reached in which the UN would be an interim administrator while sovereignty passed over (theoretically) from the Dutch to the Indonesians. Then the question would finally be settled in a referendum to be held in 1969 (20 years after The Hague Conference!).

But in 1969 the U.S. was no longer worried about Irian Barat becoming part of Indonesia, since the Djakarta puppets had made its rich mineral deposits and strategic potential completely open for exploitation by Wall Street and the Pentagon.

The U.S. part in the negotiations over New Guinea had another function in addition to preventing a possible line-up in which the U.S. would be forced to militarily intervene on the side of the Dutch.

It also opened doors for other contacts with the Indonesian government, doors that had been closed since 1958. As Schlesinger put it, "Kennedy now moved to take advantage of the improved atmosphere.... When private American oil contracts were up for renegotiation and Sukarno threatened restrictive measures, Kennedy sent out Wilson Wyatt . . . to conduct negotiations for new contracts, a mission which Wyatt discharged with notable dispatch and success." [p. 535]

The amazing thing about this success for U.S. imperialist diplomacy is that it occurred only a few years after this same country -- the U.S. -- had been caught red-handed in an attempt to overthrow the Indonesian government. And yet Washington managed to become a key figure in negotiations that presumably had nothing to do with the U.S.! But this triumph of imperialist maneuvering and trickery had much less to do with the "brilliance" of Ellsworth Bunker and others than it did with the hard facts of life in Indonesia. Raped by the Dutch for 350 years and then saddled with a robbers' "peace" by The Hague agreements, Indonesia needed foreign exchange so desperately that its nationalist government, no matter how much it hated the imperialists, was still granting them economic concessions in 1962 and later.

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