IT was only after the transfer of sovereignty from the Dutch to the Indonesians late in 1949 (for the Indonesian part of New Guinea -- West Irian -- an odd interim solution was found) that the tragic consequences for Indonesia of the shortsighted colonial policy of the Dutch were felt to the full. The administrative and political experience of the Indonesian people proved inadequate to cope with the chaotic conditions which ensued. Everything seemed disorganized. How could it have been otherwise? There had been two military conflicts -- first against the Japanese and then the revolution itself. There had been, as well, any number of minor political antagonisms and clashes. Then there was the confusion surviving from two complete but opposing administrations and civil service corps. Finally, two recently hostile armies -- the revolutionary army of the Republican government in Jogjakarta and the army of the colonial Dutch Federal government in Jakarta -- had to be amalgamated into one. At the outset, to solve these problems, and the serious financial difficulties facing the state, the Indonesians seemed able to offer little more than fruitless politicking. It was the general inclination to throw all the blame for such seemingly insurmountable obstacles onto the Dutch.
Now, more than five years later, we are still wrestling with essentially the same difficulties. The administration is overstaffed for its task. There are now almost five times as many officials as there were in the prewar colonial bureaucracy, and far and away the largest share of the government budget goes to pay civil service, army, and police salaries. Even so, the salaries paid for government posts are far from adequate to meet the constantly rising cost of living; corruption is as a result unavoidable. Some officials misuse their authority to obtain extra earnings for their own pockets, and the large amount of state interference in economic affairs, inherited from the Dutch, provides highly fertile soil for the growth of corruption. The whole of economic life is carried on in a large part via government offices and official papers.
In that economic life, trade is central; the state obtains most of its revenues by levying heavy duties on imports (for many items as much as 200 per cent) and (to a much lesser extent) on exports. And these duties make for high prices. But the chief source of inflationary pressure is undeniably the relatively excessive nonproductive expenditure of the government. In 1954 the deficit was almost four billion rupiahs on a total budget of twelve billion, and for the first half of 1955 it ran to nearly one and a half billions. The government has been covering these deficits by bringing into circulation new money obtained as loans or advances from the Bank of Indonesia, but how long can that go on?
In recent years world market conditions have often been against us. We have not always been able to sell our raw materials abroad at a profit. Except for oil, exports have not risen as much as we had hoped. Some have even fallen off. Nor does the nationalist policy of discouraging foreign interests from owning or controlling Indonesian firms help to increase trade.
To find a way out of this peculiar situation an effort is being made to transform the economic structure of the country so that Indonesia will become less dependent on the export of agricultural products.
The major step in this direction must, of course, be industrialization. There has been a great amount of talking and writing on the subject in Indonesia in recent years, but, unfortunately, little has been done. With the aid of specialists provided by the UN, a Planning Bureau has drafted various plans, but, more often than not, the government has not been able to carry them through. The chief trouble is the shortage of well-trained personnel on every level, from the manager to the skilled worker.
Another factor that is now being felt more and more is the basic lack of capital. There is no money to finish many of the large state projects already begun, let alone start others. For private enterprise, too, monetary difficulties make it far from easy to work in the direction of industrialization. The importation of capital goods essential for new industry can seldom be assured by the government. Nor can we yet attract enough foreign experts. Thus, the past five years have yielded few concrete results from the plans for the encouragement of industrialization. And -- except for the oil companies -- what little industry there is bitterly bemoans its lot.
THE total picture Indonesia now presents, after more than six years of national, independent existence, is not encouraging. We are still wrestling with the same old administrative problems. The army and its morale can hardly be called ideal. Corruption is spreading further and further within the civil service. Financial and economic difficulties are accumulating at an alarming rate. And add to these the fact that in territories such as North Sumatra, West Java, and South Celebes there been armed resistance against the government.
In the face of these great difficulties and problems the activities of many of the political parties appear nothing more than fruitless -- futile botchwork, rather aggravating the situation than alleviating it. The one party now chuckling to itself over the situation is, of course, the Communist party, which no doubt hopes it will before long have its inning at bat. The Communists supported the earlier Ali Sastroamidjojo (Nationalist) government, because they believed it would lead the country into a blind alley more quickly than any other. The Communists then opposed the subsequent Harahap regime (coalition of the Masjumi, Socialist, and other parties) because of its pro-Western leanings. Now with the recent return to power of Ali Sastroamidjojo, at the head of a coalition cabinet which represents almost all parties except the Communists, it seems likely that the Communists will continue their militant opposition to the government.
Indonesia's activities in the field of foreign affairs must be seen in the light of her domestic problems. One key policy has been to lay emphasis on the unsatisfactory relations with the Dutch, because they still occupy so predominant a position in Indonesian economic life. Thus, the West Irian question has become a critical issue. We long for the world to grant the justice of our case and lend us support in our controversy with the Dutch. The feeling that not only in West Irian but everywhere the Dutch are still always blocking the road to Indonesia development and progress, especially economically, is very strong. It is, in fact, at the core of nationalist sentiment.
Yet, let us recognize it, this point of view is itself an obstacle to progress, one which prevents us from becoming aware of our own shortcomings and thus of the real nature of our dilemma. For what the people of Indonesia now need most of all is more knowledge and more skill: more knowledge of the present situation with all its problems and difficulties, and more skill to solve them. With time and experience this is sure to come, but for the moment we seem to be losing the race with time. We still do not know where and how to begin, and meanwhile the problems are piling up.
One bright spot in all this is that our country people have not yet been greatly disturbed by all these problems at the government level. The people in the desa, or village, produce their own food, and do not have so many needs from the outside world. The desa has shown in the past that it can survive without money. In our national existence, then, it goes to make up a vast area where the tendency toward stability and order is at its greatest. Only in the regions where there are rebels and guerrillas operating is the desa in turmoil. Provided the areas of turbulence do not expand, the order and stability of the desa will prove the factor able to prevent the complete national chaos the Communists are so hoping for.
And as long as that is true, there is still time for us to make up for our shortcomings. We can concentrate on obtaining more knowledge and understanding, and greater efficiency in the government of our state, and on gaining more skills, managerial and labor alike, for a more modern economy. Then we shall be able to make the state's administration more efficient and its financial basis sounder -- both of which are definitely preconditions for securing the capital and capital goods we shall be needing in constantly increasing quantities.
From a long-range point of view the chances for the fulfillment of both these conditions are not unfavorable. The Indonesian people -- that is to say, the people in the desa and the masses in the cities -- are calm, hard-working people with many fine qualities. They can hardly be held responsible for the difficulties now facing Indonesia. The country's first general elections were held a few months ago, and the seriousness with which they were taken indicated that the people will be able to assume a share -- if only a small one -- in responsibility for the course of affairs. Up to now it has been only the intelligentsia, the politicians, at best the literates, who have been responsible. With their lack of knowledge and experience, the politicians may lead the new Indonesian state into a deadlock; nevertheless one is certainly justified in believing that the people as a whole will muster the strength to help the country find its way.
I myself am convinced that the Communists who believe that Indonesia's existence as a nation will end in complete fiasco, are able to do so only because they underestimate the regenerating strength of the Indonesian people.
Translated by James S. Holmes and Hans van Marle