Indonesia's Security Perspectives

Dr. Udai Bhanu Singh, Research Fellow, IDSA


Indonesia realised early on that its privileged position in terms of size, population and location ordained a special role for it in the region. This article seeks to show Indonesia's attempt to live up to that image. Indonesia is made up of strategically located islands and commands a number of important straits which have a direct bearing on commercial and naval traffic in the area. It has a rich heritage rooted in the powerful Sri Vijaya and Majapahit empires.1 However, its inability to defend itself against Japanese attacks in the forties eventually triggered the formation of a modern Indonesian Army. Indonesia has actively contributed to both development of institutions and to theory- building. Its concept of security has evolved from a period of Confrontasi (which governed a relationship of tension with Malaysia) to the formation of ASEAN in 1967 and the formation of the ASEAN Secretariat in Jakarta afterwards. There have been similar contributions in the field of ideas.

Domestic Security

The economic crisis demonstrated that several domestic factors— social, economic and political—have a bearing on Indonesia's security policy. Many constraints were placed on Indonesia's security policy as a result of the financial turmoil. This particularly had its impact on arms acquisitions. Besides, any kind of social conflict could have a long term adverse impact on security.

Suharto's New Order regime had been responsible for pulling Indonesia out of the economic doldrums and making it a power to be reckoned with. He brought down inflation, opened up the economy to Western aid and investment. He relied on Chinese businessmen with international business connections rather than on indigenous businessmen. The Indonesian government gained from the oil price hike in the 1970s. In the 1980s when the oil prices fell it encouraged technocrats to build up an efficient non-oil sector. Before he was overthrown, Suharto presented a very unrealistic budget. His successor, Habibie did not demonstrate the ability to take tough decisions. Anti-Chinese feelings are common; the Chinese community tended to be demonised causing them to flee. When rioting broke out and Chinese shops became targets, President Habibie stated openly that he would be happy to see them replaced by indigenous traders. Demands were raised to redress the balance in favour of the indigenous Indonesians by instituting positive discrimination (as achieved in Malaysia). Habibie relied heavily on Muslim support and alienated Chinese support. This delayed normalisation as the indigenous Indonesian businessmen were denied access to Chinese money to restart their business.

The Indonesian economy appears to be stabilising. Following Mr Wahid's assurances to foreign financial institutions that corruption will be severely dealt with, World Bank and IMF agreed to negotiate on the next loan package that had been witheld by them because of a bank scandal and dispute over East Timor. Indonesia's net foreign exchange reserves in the third week of November 1999 increased to 16.5bn US dollars: the increase was attributed to an increase in the proceeds from oil sales.2 In the meantime, gross foreign exchange reserves also increased by 210.8m to 27.42bn dollars.

Table 1. Economic Forecast for Indonesia: Real GDP/GNP (% Change)

1997 Actual 1998 1999 2000

PECC Forecast 4.7 -14.0 -2.5 2.0

OECD Forecast 4.7 -15.5 -3.0 3.0

Source: Based on PECC and OECD figures in Regional Outlook: Southeast Asia 1999-2000

Table 2. Recapitalisation Needs of Indonesia's Banking Sectors, 1998 Estimates (Percentages)

NPLs/total loans Capital-asset ratio CAR after NPL Recapitalisation

(CAR) write-off needs (% of GDP)

30-40 8-10 -17 19

Source: Ramkishen S. Rajan, The Currency and Financial Crisis in Southeast Asia: A case of "Sudden Death"" or "Death Foretold"? IPS Working Papers no.1 (Singapore Institute of Policy Studies, 1998).

Table 3. Select Economic Indicators

1991 1992 1993 1994 1995 1996

Nominal GDP (billion US$) 128.2 139.1 158.0 175.5 197.7 222.5

Real GDP (change %) 8.9 7.2 7.3 7.5 8.1 7.8

Exports (change %) 19.9 14.7 6.6 9.0 4.3 6.5

Imports (change %) 16.8 6.6 4.4 13.3 16.8 12.9

Unemployment Rate (%) 2.5 2.7 3.1 4.4 7.2 4.9

Exchange Rate (US$/Rp) 1,950 2,030 2,087 2,164 2,253 2,343

Population (millions) 182.94 186.04 189.14 192.22 195.28 200.00

Source: Indonesia Financial Statistik, vol. XXIX, no. 12

Table 4. Indonesia: Inflation Rate (per cent)

1980-89 1990 1991 1992 1993 1994 1995 1996 1997 1998e 1999e

9.6 7.8 9.4 7.5 9.7 8.5 9.4 7.9 6.6 20.0 15.0

Source: World Economic Outlook May 1998 (IMF)

Asian Development Outlook 1998 (ADB)

There is a feeling that with the slipping away of East Timor from Indonesian control other separatist movements in an ethnically heterogenous society spread over several thousand islands will be encouraged. It will have profound short and long term domestic social, economic, cultural, not to say, regional and international implications. Indonesia has more than 13,500 islands spread over 3,000 miles and a multiethnic society. It was expected that in an archipelagic State with such diversity in terms of its ethnic, linguistic, and religious composition, granting of autonomy to one part would spell trouble in another (Irian Jaya, Aceh, Riau, Ambon).

Other Asian States with multi-ethnic societies are similarly confronted with separatist movements (often with active support from across the border accompanied by proliferation of small arms). While in opposition, Megawati Sukarnoputri of PDI-Struggle [Indonesian Democratic Party-Struggle] had objected to the argument which maintained that East Timor was too much of a burden to remain part of Indonesia. She maintained that whatever happens East Timor is part of Indonesia 3 There are others who argue that East Timor was a case sui generis in as much as East Timor had been a Portuguese colony whereas Indonesia is made up of the former Dutch East Indies. But the Indonesian military definitely regarded this as setting a wrong trend which could lead to the disintegration of the country.

Shutting the stable doors after the horse has bolted, the Indonesian Home Minister Surjadi Sudirdja has said Jakarta will consistently reject all demands for separation. He said that the legislation on wide-ranging regional autonomy (Law No. 22/1999) was the best the Centre could offer for regions to become self sufficient. Meanwhile the debate on federal vs unitary State continues in Indonesia.4 Jakarta's concern has to be seen in the context of the deeper question of the relevance of ethnicity. Can each and every ethnic or sub-ethnic group aspire for statehood and to what extent is this in the best interest of international relations?


Political Culture

Indonesia has developed its own unique political culture in terms of the characteristic orientation and assumptions. Political activity in Indonesia has traditionally been substantially controlled. In 1987 Pancasila was enunciated as the State ideology which all political parties were forced to accept as their sole guiding principle. Through the existence of a State-sponsored functional group known as Golkar (Golongan Karya) and control over the proliferation of other political parties, the State had effectively manipulated the political structure of the country.

Indonesia is going through a period of political turmoil. This political churning coincides with the period of economic crisis, which has hit Indonesia alongwith the rest of East Asia. The first phase of the crisis ended when President Suharto resigned in May 1998 (after 32 years of rule) and Habibie (who was perceived to be part of the same elite) took over. The second phase began when the ghost of the unfulfilled political aspirations of the people came to haunt the ruling elite of Indonesia yet again with the people of Indonesia demanding radical changes in the economic policy, the centre-province relations, and the role of the armed forces in governance. They desired radical changes in the system that Suharto had so carefully built over the years.

The world's third largest democracy, Indonesia, held its first free elections in 44 years on June 7, 1999. As many as 48 parties contested. President Suharto had kept political aspirations bottled up and in the changed circumstances if new demands from various ethnic groups and outlying regions begin to emerge, it will be difficult for the political parties to remain unaffected. If this leads to political turmoil, then the armed forces may be tempted to intervene.

By the time Habibie took over as the country's fourth President in over five decades, many of the institutions built by Suharto had begun to be loudly questioned. For instance, Suharto got much of his strength from the doctrine of 'dual function' (dwifungsi) role of the armed forces (ABRI). Members of the armed forces were installed in the Cabinet, People's Representative Council, the civil service, state corporations, even as Governors, and Chief Justice of the Supreme court. They also engaged in commercial activities. The politicisation of the ABRI was considered unprofessional by Western standards. Indonesia has witnessed festering insurgencies in East Timor, Irian Jayah and Aceh. The use of armed forces for internal duties tended to create a rift between the civilian population and the armed forces. Among the eight points agreed in the Ciganjur Agreement was the phasing out of the military's role in politics over a six year period. To begin with, the name of ABRI was changed to TNI to give it a fresh image.

Political activity in Indonesia was substantially controlled. The Suharto regime had provided tangible material advancement that was widely noticed. What got neglected were the due process of law and a semblance of fair play. The people of Indonesia are now demanding what they missed during the 32 years of President Suharto's rule. The people's struggle is not likely to subside until some radical changes are brought about.

According to some, President Habibie was really a chip off the old block. Many of those tasked with making the massive changes under Habibie belonged to the Suharto era. Nonetheless Habibie was the man of the hour and he was instrumental in bringing about some important political changes:

l February 1, 1999: The Parliament revised three key political laws governing elections, political parties and the composition of the national and local legislatures.

l June 1999: The above laws were in force when elections were held in which 48 parties participated with 93 per cent voter turn-out.

l September 1999: Government controls over the press were lifted.5

Yet the demand for reformasi resounded once again as the opposition regrouped. This began the third and the current phase which has Abdurrahman Wahid as President and Megawati Sukarnoputri as Vice president. This change was brought about by a vocal leadership. It includes Amien Rais, who took over as Speaker of the People's Consultative Assembly (MPR) in October 1999. Besides being an academic, he headed the Muhamadiyah movement (a Muslim welfare organisation). Abdurrahman Wahid is the leader of Nahdlatul Ulema, Indonesia's largest Muslim organisation with 30 million members; and Megawati Sukarnoputri is the daughter of Indonesia's first President, Sukarno. She represented the Partai Demokrasi Indonesia (PDI) inside the People's Representative Council for over 10 years.

Break with the Past?

Indonesia enjoyed a federal state structure for about a year till a transition to a unitary structure took place in 1950 with the enactment of its Constitution. Whether it was the 'guided democracy' of President Sukarno or the 'new order' of President Suharto, there is a continuity in the manner in which Indonesia's ruling elite has struggled to hold on to the reins of power. The search for Suharto's successor had really begun in March 1993 when Suharto was elected president (at age 71) for the sixth consecutive term. It was feared that the succession may not be smooth as Suharto had built up the institutional edifice which was based on an individual .

There has been uneven development of Indonesia's regions. This is seen in the case of Java. Java happens to be the centre of power and dominates over the rest of the country. Here 60 per cent of the population occupies only 7 per cent of the land. The other regions which possess considerable natural resources and contribute substantially to the revenues collected by the Centre are demanding a greater share in the revenue collections and a greater role in managing their own affairs. While the Centre has promised to increase provincial powers it would appear that a loosening of control and a federal structure may not be easy to grant because of deeply entrenched economic and political interests. In the struggle which ensues the concern for human rights gets compromised at times which in turn leads to a hardening of positions on either side. This has led to accusations that Dutch colonialism was replaced by Javanese rule. The leadership has often cautioned against human rights excesses.6

Indonesia gained independence after a protracted struggle under Sukarno's leadership. Under the system of 'guided democracy' that he proclaimed in 1959, consensus replaced decision by a majority, functional representation replaced territorial representation and the role of political parties diminished. The idea was to put national interest above sectional interest and to arrive at unanimous agreements through a process of consultation. Sukarno saw guided democracy as giving direction to a rudderless country. He depended on the military for support. But it was to balance out this dependence on the military that Sukarno struck an understanding with the Partai Kommunist Indonesia (PKI), the Communist Party of Indonesia. However, this only aroused the fears of a communist takeover—fears which were reaffirmed when an abortive coup took place on October 1, 1965, resulting in the murder of senior army officers.

It was in the backdrop of the failed communist coup that General Suharto and the army emerged as the dominant political force. Sukarno, in keeping with Javanese political tradition, was not immediately removed but his wings were clipped by banning the PKI and purging supporters. He was finally removed from office in March 1967 by the People's Consultative Assembly (called MPR by its Indonesian initials). Suharto, who had proclaimed a 'new order' was elected by the Assembly in 1968 for a five year term as chief executive.

Suharto's watchword was 'political passivity'. Political parties' activities were restricted while a functional group known as Golkar was sponsored by the state and given all support. The authoritarian trend went a step further in 1987 when all political parties were forced to accept the state ideology, Pancasila as their sole guiding principle. Another way in which the functioning of political parties was effectively suppressed was by forcing them to join in either of the two groups. Reduction in the number of political parties led to infighting in them due to a natural difference of opinion. The army and the President took full advantage of the confusion. The parliament was weakened and the MPR became a virtual 'rubber stamp' of the President and it met only once in five years.

The Speaker of the House of Representatives Akbar Tandjung has said that the position of the President as the Supreme commander of the TNI must be clearly defined in the constitution (which is in the process of being amended) to prevent possible abuse of power in the future. In a significant development, the National Human Rights Commission indicted Gen. Wiranto on January 31, former overall commander of TNI and Senior Coordinating Minister for Politics and Security for human rights violations in East Timor. He was then asked by the President to step down.

External Security

Indonesia's external security is as much determined by the way in which it determines its relations with the neighbouring States and the major powers. These relations have been in a state of flux because of the interplay between domestic and external security matrices. The manner in which Jakarta is able to deal with the domestic reverberations will determine to a large extent its role in regional affairs and the seriousness with which its views are taken.


President Abdurrahman Wahid's visit to India in February was an epoch making one. It only proved that there is a great potential for the two countries to cooperate in areas of strategy and economy. His visit is expected to strengthen cooperation in the strategic field besides giving a boost to economic ties and political understanding at a time when Indonesia is just emerging from the economic crisis.


The Portuguese President Jorge Sampaio became the first Head of State to visit East Timor since it voted for independence. Portuguese foreign minister Jaime Gama said that with the East Timor issue now resolved, Portugal had decided to resume full diplomatic ties with Indonesia.7 Portugal has pledged an investment of 225 million dollars in East Timor over three years which is bound to have its own implications for Indonesia.8

Australia, ASEAN

ASEAN pronounced Aceh an integral part of Indonesia following an informal summit in Manila in November 1999.

Indonesia is known to have had difficulties in its relations with Australia in the recent past. Many East Timorese and human rights groups have been operating in Australia since 1991 Dili massacre against the Indonesian action. Representatives of the East Timor movement and the members of Indonesia's People's Democratic Party (PRD) were using Australia as a base to jointly campaign against Indonesian rule. In a rally organised in Sydney Jose Ramos Horta announced the launch of a campaign to press for Australia to withdraw its recognition of Indonesian sovereignty over East Timor.9

There was also the celebrated "Mantiri episode"10 when Jakarta was forced to withdraw (former chief of general staff) Lt. Gen. H.B.L. Mantiri as its candidate for ambassador to Canberra, after the Australian Foreign Minister Gareth Evans demanded an apology for Mantiri's remarks supportive of the 1991 Dili massacre.11 This was followed later by two incidents in which demonstrators in Australia burned the Indonesian flag. After a considerable gap and a cooling off period, Jakarta posted another envoy to Canberra. It even went ahead and signed an all-important security pact with Australia. But it had its revenge when it forced Canberra to withdraw Mr.Miles Kupa as its envoy to Jakarta because he had criticised Mr Suharto and his family for their business connections.12

Two joint military exercises with Indonesia's most important defence ally, Australia, were postponed on grounds that there were cutbacks on ABRI's budget.13As Indonesia-Australia relations plummeted to a new low, Indonesian Foreign Minister Alwi Shihab emphasised the need for mutual trust to improve relations.14 The Indonesian President openly said that he did not care if relations between Indonesia and Australia deteriorated. He was reacting to Australian Prime Minister Howard's statement before the Parliament in which he blamed Indonesia for the illegal immigration of people from West Asia to Australia through Indonesia.15 Indonesia is no longer party to the Timor Gap Treaty (concerned with the sharing of oil and gas revenue) with Australia. In place of Indonesia, the UN will be Australia's treaty partner in the transitional phase.16


On assumption of office among the first few countries the Indonesian President Abdurrahman Wahid visited was China in the beginning of December 1999. This reaffirmed the value that Jakarta attaches to relations with Beijing since diplomatic ties were resumed between the two countries about ten years ago. This 'fence-mending' mission acquired significance in the context of President Wahid's recent call for the creation of a five-power entity comprising China, India, Japan and Singapore besides Indonesia. President Wahid also sought to reassure the Chinese side that the Chinese-Indonesians will be provided the same rights as other nationalities and be allowed to fully merge into the Indonesian society. Chinese President Jiang Zemin stressed that since the outbreak of the Asian financial crisis, the two countries have understood each other and cooperated closely on many international issues.17 Wahid also announced the formation of a China Institute in Jakarta. In a related significant move the Indonesian Air Force Chief of Staff, Air Marshal Hanafie Asnan paid a five-day official goodwill visit to China at the invitation of Lt. Gen. Liu Shunyao, commander of the Air Force of the Chinese People's Liberation Army.18


Indonesia has been keen to establish a relationship with Israel and with the Indonesian President's own persuasive skills Israel agreed to invest 200 million US dollars.19 Foreign Minister Alwi Shihab is reported to have told Commission I of the DPR on December 7, 1999 that improving relations with Israel was important not only for reviving the economy but also to save military personnel from being tried by an international court. He said: "…Our generals must not be tried by an international court."20 The Israeli Chamber of Commerce and their Indonesian counterparts were reported to have held a meeting in Jakarta in December 1999 where the trade potential of their respective countries was discussed.


President Wahid visited the US in November 1999. He clarified that his recent proposal for closer cooperation between Indonesia, India and China was not meant to be an anti-American or anti-Western Axis but aimed to only help one another. It would rely heavily on the West for foreign investment.21

Indonesian Foreign Minister Alwi Shihab claiming that Indonesia-US relations had improved, said: "In the past, I said /go to hell with your aid, but I would now say /go to heaven together with our friendship".

Financier George Soros had in fact expressed his willingness to invest in Indonesia after Jakarta disclosed plans to establish trade relations with Israel.22 Even when the military cooperation under the international military Education and Training (IMET) programme was banned by the US Congress in 1998 it continued under the Joint Combined Exchange Training (JCET) scheme run by the Pentagon. Hence, military cooperation with Indonesia is considered important by the US for the sake of its own readiness.

Military Doctrine

Indonesia has made some notable contributions to the development of military doctrine. Many of the ideas have relevance for the other States in the region and they have been a source of influence for them.

l The doctrine of "people's war" or Hankamrata which has a Maoist ring to it. In the case of an attack by outside forces, the Indonesian forces would first seek to repel the attack. Then it would withdraw to regroup with the people as a guerrilla force (in true tradition of its independence struggle against the Dutch). In this concept much reliance is placed on Indonesia's strategic depth and large population (approximately 204.6 million): the enemy would be drawn in, surrounded and attacked. The ground forces are supported by the strategic sea- and airlift capabilities of the navy and air force. This is feared to be Jakarta's Achille's heel as lifting its forces by air and sea across its vastly spread out islands in a short span of time is indeed a herculean task. This doctrine is considered by some strategic analysts as inadequate to deal with the emerging challenges of advanced weaponry used both at sea and in the air. It is also insufficient in dealing with some complex issues like low-intensity conflict, illegal migration, drug smuggling and piracy.

l The '"mandala theory"has its reflection in the Indonesian primacy to the centre and not the periphery. This has meant that Java has emerged as Indonesia's centre and the Javanese occupy a central role in decision-making. Java happens to be the centre of power and dominates over the rest of the country. Some have even alleged that Dutch colonialism was replaced by Javanese rule.23 As recent events show this has been a major cause of discontent among the neglected outlying regions of Indonesia. However, the same centre-periphery concept has an echo in the idea of "ASEAN Kecil" which essentially refers to a core of ASEAN- Indonesia, Malaysia and Singapore- countries which are considered central to South East Asian security because it contains crucial infrastructural elements.

l The doctrine of "dual function" (dwifungsi) stipulates the extension of the military's role to the political, economic and social spheres besides its strictly defensive and security functions. This growth in military powers was a gradual process. Myanmar military leadership had shown interest in dwifungsi as an appropriate means to deal with its own problems. However, with dwifungsi coming under a cloud in Indonesia itself it is not clear whether Yangon would like to incorporate this feature in its proposed Constitution formally.

l The doctrine of National Defence and Security

l The doctrine of Non-Military Function

l Wawasan Nusantara or Wawasan Bahari Indonesia (Indonesian Concept of the Sea) is a unique contribution to the development of military doctrine in the region. This has implied an all-round development of the naval force with a strong war fighting fleet and commercial capability.


Indonesia's evolving security policy and its ability to retain its position in regional affairs will be keenly watched by all concerned. Indonesia is faced with many challenges. It has a valuable legacy of dealing with such situations. Nations big and small in the region are observing Jakarta's response to the threats to its integrity. In the developing situation, new ways of dealing with disturbances at home and cooperating with major powers and others in the region will need to be devised. This could mean the need to identify common threat perceptions so that a more nuanced and sophisticated response to security challenges of the region could be advanced. If it can bend like the stem of a reed when a strong wind blows and then bounce back again, Indonesia will have overcome much of its problems.



1. Vishal Singh, Ïndonesia and the Security Problems of South East Asia", in MS Rajan and Ganguly, ed, Great Power Relations, World Order and the Third World (Vikas , New Delhi, 1981), pp.326-339.

2. BBC/SWB/FEW/0617, WB/1, December 1, 1999.

3. Ibid. She blamed those in power (including the legislature, the executive, and the judiciary) for turning it into a burden.

4. BBC/SWB/FE/3716, B/2, December 12, 1999

5. Asiaweek, December 31, 1999-January 7, 2000.

6. For instance, (then) President Habibie on the occasion of the TNI's 54th anniversary celebrations called upon the military establishment to uphold security in a fashion consistent with the protection of human rights. See Hindu October 6, 1999.

7. BBC/SWB/FE/3707, B/1, December 2, 1999.

8. BBC/SWB/FE/3709, B/1, December 4, 1999.

9. BBC/SWB/FE/2700, B/5, August 26, 1996.

10. "Jakarta drops Mantiri as envoy choice," New Straits Times, July 7, 1995.

11. See "Special ties weather Mantiri affair", New Straits Times, July 12, 1995.

12. V. Jayanth, "Jakarta has its revenge", The Hindu, June 22, 1996.

13. Australian Defence Minister John Moore denied that the deferment had anything to do with human rights excesses by the Indonesian elite unit, Kopassus (with which the exercises were earlier scheduled)."Aussie-Indonesian joint exercises put off", New Straits Times, October 30, 1998.

14. BBC/SWB/FE/3712, B/1, December 8, 1999.

15. BBC/SWB/FE/3709, B/1, December 4, 1999.

16. BBC/SWB/FE/3711, B/4, December 7, 1999.

17. BBC/SWB/FE/3708, B/1, December 3, 1999.

18. BBC/SWB/FE/3745, G/1, January 2000.

19. BBC/SWB/FE/3711, B/1, December 7, 1999.

20. BBC/SWB/FE/3715, B/2, December 11, 1999.

21. Hindu, November 14, 1999.

22. BBC/SWB/FE/3713, B/3, December 9, 1999.

23. The pedigreed nature of this island can be gauged from the fact that it was here that the fossil remains of Java Man, who lived half a million years ago were discovered. But the actual history of the country is dated from first century AD with the arrival of merchants from India. In the seventh century the Hindu Srivijaya empire and in the 14th century the Majapahit empire dominated before the Arabs took over in 1478.