Indonesia: From Economic Crisis to Political Turmoil

Dr. Udai Bhanu Singh, Research Fellow, IDSA


Physical invasion of a State’s territory constitutes the most obvious threat to its security. But an equally significant, if not greater challenge emanates from the lack of unity within, which is at times aggravated by economic causes and other non-military factors. Indonesia’s motto "Bhinneka Tunggal Ika" or "Unity in Diversity" symbolises the aspiration of its people for unity inspite of the tremendous ethnic and cultural variations which characterise this largest Southeast Asian nation. But the very fundamental assumptions on which a State is built up can sometimes be brought into question when something as cataclysmic as an economic crisis or political turmoil overtakes it. The Indonesia drama is played in several Acts. When the curtain rises the setting is the Economic Crisis of 1997 and somewhere half way through the play the leading protagonist is seen limping because the ‘pebble in the shoe’ (viz. East Timor) has grown into a rock of resistance. The play is not a tragedy in the classical sense because whatever the odds, the chief protagonist continues to exude confidence.

Table 1. The Indonesian Islands

No. Island/Province Size (Square km) Percentage of Land Territory

1. Sumatra 473,481 24.67

2. Java and Madura 132,18 6.66

3. Kalimantan (Southern Part) 539,46 28.1

4. Sulawesi 189,216 9.86

5. Bali 5,561 0.29

6. Lombok 4,609 0.75

7. Flores 14,250 0.75

8. Sumbawa 15,500 0.80

9. Timor 29,874 1.55

10. Seram 18,000 0.98

11. Hamahera 20,000 1.05

12. Irian Jaya (Western part of the island of New Guinea) 421,981 21.99

Source: News from Indonesia,vol. 1, no. 8, August 2000.

Indonesia enjoys the distinction of being the world’s most fragmented major state. It is no wonder that Sukarno once said that his greatest achievement was that Indonesia existed. It occupies a privileged position in terms of size, population and location. Indonesia realised early on that its privileged position in terms of size, population and location ordained for it a special role in the region. Indonesia is a large archipelagic state with many islands (only 6,000 of which are inhabited) spread over 3,000 miles. Besides having strategically located islands, it commands a number of important straits. Indonesia is the fourth most populous nation in the world with a population in 1999 at 200 million. There are strategically located islands and it commands a number of important straits which has a direct bearing on commercial and naval traffic in the area. It will have profound short and long term domestic social, economic, cultural, not to say regional and international implications. Indonesian islands are like "stepping stones" between the Indian Ocean and the Pacific Ocean. The relatively narrow straits hold commercial and strategic importance. These are: Malacca, Lombok, Sunda and Ombai-Wetar. The Malacca Strait is a potential choke point for the seaborne traffic between Japan and the Persian Gulf. Through its waters about two-fifths of the world’s shipping passes.

Some islands like Java, Madura and Bali which comprise only one-thirteenth of the total area of Indonesia, contain as much as about two-thirds of its population. Java itself has less than 7 per cent of Indonesia’s total area but has about 60 per cent of its population. The overpopulation has led to acute social turmoil.

Indonesia’s size has a positive and a negative side to it. The positive side is that its large size makes a conventional attack from an external source less likely. The negative side is that it tends to make the country unwieldy. So the domestic stability of Indonesia has come under threat. There is the danger of destruction of its economy because of the disruptive impact of the economic crisis. There is a fear of influx of refugees, and consequent influence on trade and industry.

Economic Turmoil

A major manifestation of Indonesia’s problems was the economic crisis.1 Indonesia’s success as a developmental model was largely hailed before the economic crisis overtook the country in 1997. This was visible in indicators such as GDP growth rate (see Table), infrastructure development, decline in poverty and population.

Table 2. GDP: Growth Rate (Per cent)

1980-89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000


5.3 9.0 8.9 7.2 7.3 7.5 8.2 7.8 4.9 -13.7 0.0 2.0

Source: Asian Development Outlook 1999, 1998, World Economic Outlook, May 1998 (IMF), Regional Outlook: Southeast Asia 1999-2000; and 1998-99.

Growth under Suharto had however, not been able to bridge the yawning gap between the rich and the poor. The impact of the crisis was felt in rising unemployment, rising prices (to meet IMF requirements), rising poverty and a looming food security crisis. The Indonesian economy collapsed because of a weak banking system and escalating private short-term debt. The impact of the economic crisis was such that in mid-1998 over 1.5 million Indonesian families were facing acute food shortages and malnutrition.2 A looming food security crisis was aggravated by the following factors:3

 Half of Indonesia’s population estimated to be living below the poverty line.

 A depreciation of the Indonesian rupiah meant that food imports became prohibitively expensive.

 Umemployment undermined the purchasing power of the people.

 The public distribution system, being dominated by the ethnic Chinese, was disrupted as the Chinese came under attack.

 Environmental calamities like the drought caused by the El Nino effect reduced food production.

 Lack of agricultural inputs (fertilizers and pesticides).

 Loss of people’s faith in the government.

Table 3. Indonesia: Inflation Rate (Consumer Price Index) (per cent)

1980-89 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000


9.6 7.8 9.4 7.5 9.7 8.5 9.4 7.9 6.6 58.2 17.0 9.5

Source: World Economic Outlook May 1998 (IMF)

Asian Development Outlook 1999

Asian Development Outlook 1998

Table 4. Indonesia: Exchange Rate to the Dollar

Currency 1993 1994 1995 1996 1997 1998

Rupiah 2,102.6 2,180.9 2,275.8 2,363.6 4,666.9 10,147.5

Source: Asian Development Outlook 1999.

Table 5. Indonesia: External Debt Outstanding ($ million)

1993 1994 1995 1996 1997 1998

83,299 101,278 106,455 113,143 138,018 —

Source: The Far East and Australasia 2000

Table 6. Indonesia: Foreign Direct Investment ($ million)

1992 1993 1994 1995 1996 1997

1,777 2,004 2,109 4,348 6,194 5,350

Source: The Far East and Australasia 2000

Table 7. Labour Demand and Supply, by Education Level, 1988-2003 (per cent)

Education 1988-93 1993-98 1998-2003

Level Demand Supply Demand Supply Demand Supply

Primary & below 48 29 27 16 20 3

General Lower Secondary 22 21 25 21 27 15

Vocational Upper Secondary 13 20 17 18 19 21

General Upper Secondary 12 21 24 30 24 39

Tertiary 3 4 4 5 6 7

University graduate 2 6 2 10 3 15

Total (%) 100 100 100 100 100 100

Total Number (millions) 11.5 11.9 12.6 13.0 13.3 13.7

Note: Percentages may not add to 100 due to rounding.

Source: National Development Planning Board (Bappenas). As cited in RW Baker et al. Ed, Indonesia: The Challenge of Change ISEAS, Singapore, 1999)

Buying up stocks and shares became easier in Southeast Asia because of the hike in the rate of the dollar. Those with dollars could buy up companies on the cheap. Countries like Indonesia which have been avowedly pro-West could be compelled to reconsider their options if international financial and lending institutions like IMF and World Bank do not make their policies more flexible and suited to the needs of their creditors. Critics in fact point out that the bail out of the debtor countries is actually a bail out to the lenders to the country. Before he was overthrown, Suharto presented a very unrealistic budget. And Habibie did not demonstrate the ability to take tough decisions after him.

Indonesia’s State Minister for Human Rights Dr. Hasballah M. Saad speaking before the 56th session of the UN Commission on Human Rights in Geneva on March 30 admitted that while the financial crisis would be held mainly responsible, there were other contributing factors like lack of accountability and malpractices such as corruption, collusion and nepotism, in both public and in private institutions in our country. The economic crisis demonstrated that several domestic factors—social, economic and political—have a bearing on a country’s security policy.

Many constraints were placed on air and maritime defence. In order to meet what it regards as its threat perceptions Indonesia had earlier embarked on a military modernisation. This particularly had its impact on arms acquisitions. Indonesia (like the rest of Southeast Asia) had witnessed substantial arms build up, with special emphasis on qualitatively superior weapons. The growth of military modernisation in Southeast Asia (Indonesia included) was reflected in various indicators like the quantum of military expenditure, strength of armed forces and paramilitary forces, and arms acquisition.

But, the economic crisis served to put the brakes on the military modernisation which the Southeast Asian nations like Indonesia had been witnessing; it succeeded in achieving what the arms control advocates had for long been unable to accomplish. Second, financial constraints have forced Indonesian companies to look for collaborative ventures. Third, the economic crisis contributed to the political turmoil. But the political turmoil was not solely the creation of the economic crisis. It had been developing over a period of time because of a number of factors. Fourth, there was a breakdown in ethnic peace in Indonesia as tensions erupted. The Chinese community became the internal enemies and were demonised. Ethnic Chinese are traders and anti-Chinese feelings have been common. Chinese shops were looted in Indonesia in the aftermath of the economic crisis. Besides, any kind of social conflict could have long term adverse impact on security.

At last there are indications that the Indonesian economy may be stabilising. It may be recalled that before he was overthrown, Suharto had presented a very unrealistic budget and after him Habibie had not demonstrated the ability to take tough decisions. Now, with President Wahid’s assurances to foreign financial institutions that corruption would be severely dealt with, the World Bank and IMF agreed to negotiate on the next loan package that had been withheld because of the bank scandal and dispute over East Timor. Indonesia’s net foreign exchange reserves in the third week of November 1999 increased to 16.5 bn US dollars: the increase was attributed to an increase in the proceeds from oil sales.4 In the meantime, gross foreign exchange reserves also increased by 210.8m to 27.42 bn dollars.

Table 8. Indonesia: Macroeconomic Data and Forecasts

1998 1999e 1999/00 2000f 2001f

Population (mn) 202.42 206.10 — 209.20 212.50

Nominal GDP (US$bn) 94.16 140.96 — 167.03 188.57

GDP per capita (US$) 461 684 — 798 887

Real GDP growth (%y/y) -13.2 0.2 3.2 Janu 4.0 5.0 ary-March

Inflation, period average (%y/y) 57.7 20.5 — 8.0 6.0

Inflation, end period (%y/y) 74.6 2.0 0.1 April 6.6 4.0

IDR/US$ (an Avg.) 10014 7855 — 7425 7300

Merchandise Exports (US$bn) 48.85 48.49 13.91 Jan- 52.86 58.14 uary-March

Merchandise Imports (cif, US$bn) 27.34 23.92 6.46 Janu- 27.50 31.63 ary-March

Trade balance (US$bn) 21.51 24.58 7.45 Janu- 25.35 26.51 ary-March

Oil/Gas exports (US$bn) 7.87 9.76 — 12.50 12.00

Oil output (mn b/d) 1.30 1.29 1.23 Feb 1.29 1.30

Current account (US$bn) 4.10 5.70 —4.95 2.60

Current account (% GDP) 4.4 4.0 — 3.0 1.4

Foreign reserves (eop, US$bn)** 22.71 26.45 27.67 Feb 24.60 23.00

E/f=Business Monitor International estimates/forecasts; eop=end of period

** excluding gold;

Source: Bank Indonesia/IMF/World Bank/BMI

Source: South East Asia Monitor, vol. 11, no. 6, June 2000.

Political System and Turmoil

The working of the political system can be observed at two levels: institutions and ideas. The Indonesian political system has been confronted by many challenges in recent years. And these challenges are both ideational and institutional. Internal security has vied for the time and attention of policy makers in Indonesia. Policy makers have realised that the challenge to security emanates more from within rather than from without in Indonesia. As such, the focus has been on strengthening and bolstering internal security rather than external security.

The political system is a product of the ideas and institutions in vogue at any point of time. Indonesia is presently passing through a period of political turmoil. This political churning coincides with the period of economic crisis. Suharto’s watchword had been ‘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 either of the two groups. Reduction in the number of political parties led to infighting among them due to natural differences 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 first phase of the crisis was directed at the removal of President Suharto. It ended when President Suharto resigned in May 1998 (after 23 years of rule).

The second phase began as Vice President Habibie took over as President. And as the people’s political aspirations remained unfulfilled they pressed for changes in the system so assidously erected by Suharto. From Habibie’s perspective the tragedy was that he was perceived to be part of the same elite of which Suharto had been the leading light and so any fundamental changes were not really expected from him. Still, Habibie did fulfil the need of the hour by smoothening the process of transition from one phase to another which he did by initiating some important political changes. The people’s movement is seeking fundamental changes in the system. In this respect it is significant that the world’s third largest democracy, Indonesia, held its first free elections in 44 years on June 7, 1999 in which as many as 48 parties contested.

This began the third phase with Abdurrahman Wahid as President and Megawati Sukarnoputri as Vice President. This change was brought about by a vocal leadership. This 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. Now, perhaps a fourth phase has begun wherein a measure of disaffection against the current President has begun to be expressed. This has reached such proportions that under the threat of impeachment President Wahid had to submit to the MPRs decision to relinquish day to day control of the government to Vice President Megawati Sukarnoputri.5

Political Institutions

Political activity in Indonesia under Suharto was substantially controlled. But, in the changed circumstances as new demands from various ethnic groups and outlying regions begin to emerge, it has already become difficult for the political parties to remain unaffected. The Suharto regime had provided tangible material advancement that was widely noticed. What got neglected was the due process of law and a semblance of fair play. People of Indonesia are now demanding what they missed during the 32 years of Suharto’s rule. The people’s struggle is not likely to subside until some radical changes are brought about. If the political turmoil picks up momentum, then the armed forces may be tempted to intervene.6

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.

Table 9. General Election (June 7, 1999): Results

Party Seats

Partai Demokrasi Indonesia Perjuangan (PDI-P) 154

Golongan Karya (Golkar) 120

Partai Perrsatuan Pembangunan (PPP) 59

Partai Kebangkitan Bangsa (PKB) 51

Partai Amanat Nasional (PAN) 35

Partai Bulan Bintang (PBB) 13

Partai Keadilan (PK) 6

Partai Keadilan dan Persatuan (PKP) 6

Partai Demokrasi Kasih Bangsa (PDKB) 3

Partai Bhinneka Tunggal Ika 3

Partai Demokrasi Indonesia (PDI) 7

Others 7

Appointed members* 38

Total 500

* Members of the political wing of the Indonesian National Defence Forces (TNI)

* Source: The Far East and Australasia 2000

 Role of the Bureaucracy

Bureaucracy as an institution in Indonesia is deserving of a detailed treatment because it constitutes one of the pillars of government. Considering its centrality in the political process any flaws in the working of the bureaucracy are certain to find their reflection in a weak government. It played the predominant role in the economic development of the country. The Indonesian bureaucracy tended to get identified with corruption and inefficiency. Was the system of ‘monoloyalty’ of the bureaucracy developed under the New Order an asset or a liability?

 Role of Golkar

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. Political activity was controlled and a functional group known as Golkar was sponsored by the state and duly supported, but with the Consultative Assembly (MPR) decision (October 3, 1999) to have ten factions reflecting diverse viewpoints.7

 Role of the Armed Forces/Dwifungsi

Suharto got much of his strength from the doctrine of ‘dual function’ (dwifungsi) role of the armed forces (ABRI). This signified the extension of the military’s role to the economic and social spheres besides the strictly military functions. This dwifungsi role was best illustrated in Suharto’s own top position in both the military and civil hierarchies. 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 engaged in commercial activities also. 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.8

 TNI has been charged with human rights violations. Many of its officers are facing war crime accusations. Jakarta is under pressure from the West to punish those guilty of human rights violations in East Timor and elsewhere. The army, then is another important Indonesian institution that is demoralised and under threat. It is true that some individuals within the army profited from the expanding functions, but did the army as an institution gain from this?

 TNI/ABRI became an interest group which created "economic and political patronage networks."9 It has created avenues for corruption and nepotism. Besides, the benefits of economic growth have not percolated. Having a vested interest in business it would find it difficult to remain neutral and above politics’.

 TNI faces opposition from the emerging middle class which wants to curb its overwhelming powers.

 "ABRI has not benefited from economic growth in the most direct sense of increased military budgets, hardware, and improved soldier welfare"

 The politicisation of the TNI/ABRI is considered unprofessional by Western standards. The army needs to be rebuilt on professional lines and a check placed on its expanding powers. But, this must be done in a graduated manner because the sudden collapse of one institution without an adequate replacement could lead to further intability.

Table 10. Military Officers in Ministerial and Governor Position, 1968-93

Period Ministerial Positions Governor Positions

Total Military Total Military

1968/1973 23 7 26 19

1973/1978 22 5 26 20

1978/1983 30 12 27 16

1983/1988 37 12 27 14

1988/1993 38 9 27 12

1993/ 38 7 27 13

Role of Media and Think Tanks

The media has been freed and intellectual activity is no longer restricted in the manner it was during the Suharto era. Under Suharto, three popular news magazines were forced to stop publication and journalists were thrown behind bars. The judiciary asserted itself when the State Administrative Court ruled that the then Information Minister had acted unlawfully in revoking Tempo’s publishing licence in June 1994.10 This has also meant that it has given a free reign to militant Islam, NGO environmentalism and human rights activism11 with all its attendant problems which a nation already in turmoil can ill-afford to countenance.

Table 11. Think Tanks in Jakarta

Think Tank Particulars (date founded; work)

Indonesian Institute of Sciences (Lem- MIPI (1956), PIPI (1967) Assists President in baga Ilmu Penetahuan Indonesia, or LIPI R&D work and advises government on national science and technology policy.

Centre for Strategic and International 1971, Private . Policy oriented (domestic and Studies international) studies. Secretariat for both PECC&CSCAP in Indonesia. Personalities: Generals Ali Moertopo, Soedjono Hoemardani (close Suharto links) Later, Gen LB Moerdani, Hadi Soesatro.

Institute for Economic and Social Research, 1971. International funding and publications. Education and Information (Lembaga Development research and projects (rural).

Penelitian, Pendidikan dan Penerangan Social and economic issues. Input to

Ekonomi dan Sol, or LP3ES) government, especially Planning agency Bappenas.

Centre for the Study of Development and 1992. Research on more general social, political Democracy (CESDA) and economic issues. Part of LP3ES. International funding and publications.

Centre for Policy and Implementation 1974 (1986). Inhouse research for the Studies (CPIS) Department of Finance. Advises government on development issues. Government funded. Personalities: Technocrats of the New Order.

Institute for Strategic Studies of Indonesia 1989. Founded by Lemhanas’ alumni. (ISSI) (Lembaga Pengkajian Strategis Autonomous research institution on political,

Indonesia, or LPSI) economic, social, cultural and defence issues. Government and private funding.

Centre for Information and Development 1993. Established by the association of Studies (CIDES) Indonesian Muslim Intellectuals, ICMI. Development research and projects, domestic and foreign policy. Personalities: BJ Habibie.

 Political Ideas and Concepts

Each country develops its own political culture. This refers to the typical orientation and assumptions that characterised it which essentially means the nature of its political forces and life as reflected in the growth of ideas. Indonesia too has developed its own unique political culture in terms of the characteristic orientation and assumptions. Some of its elements are mentioned below:

Javanese Political Elite and its Dominant Influence: At the domestic plane, each political culture has its own body of ideational heritage which shapes and is shaped by, the political institutions in the country. Thus, the governing political elite makes a conscious decision to opt for one course of action and not another, one policy instrument and not another. This is what makes its political system unique. 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. 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 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. Political activity in Indonesia has traditionally been substantially controlled. Indonesia’s State Minister for Human Rights Dr. Hasballah M. Saad speaking before the 56th session of the UN Commission on Human Rights in Geneva on March 30, 2000 said: "Over emphasis on stability for the sake of economic growth has resulted in neglect or even the suppression of certain civil and political rights of citizens."

Pancasila: Pancasila was enunciated as the State ideology which all political parties were forced to accept as their sole guiding principle.

Hankamrata: is the doctrine of people’s war which has a Maoist ring to it.

Resilience: National Resilience: President Suharto placed his complete faith in the concept of Resilience when he said that: "…the national resilience concept is the only answer to the challenges posed by a world still dominated by tension. National resilience encompasses ideological resilience based on a nation’s own identity which receives the full support of the entire nation, economic resilience capable of meeting the nation’s own basic needs, social resilience which ensures the feeling of solidarity and harmony among the peoples, and an appropriate military resilience to face aggression from outside. Without national resilience we shall always be afraid": An important tenet of this is self-reliance in defence.

"Asian Values" and the Applicability to Certain Universal Concepts in the Indonesian Context: Indonesia has contributed to the development of the idea that the growth of the concept of human rights and democracy and its actual development was unique to Asia. Hence local and historical processes must be taken into consideration. A logical corollary to this is the principle of non interference in internal affairs. The importance accorded to self-determination in the present century can be traced to the Lockean dictum that the ultimate basis of political obligation is the consent of the governed. From this derives ultimately the right to rebellion by the people against the ruler. While this rule of consent advocated by Locke was used to justify the Glorious Revolution of 1688 in England, the American Revolution in later years, and the French Revolution still later when the people decided that with the withdrawal of their consent the right of their rulers to rule over them had ceased. Similarly, it also became the rallying cry of the nationalists against colonialism and imperialism. This idea is a double edged weapon. While it has performed a very positive and constructive role in bringing about social justice it has also contributed unwittingly to the growth of civil strife, transnational conflicts and terrorism. The Indonesian Minister speaking at Geneva recently drew attention to Article 3 paragraph 1 of the Charter of the United Nations which states the need to achieve international cooperation in promoting and protecting human rights. While he voiced his country’s commitment to these principles he was also critical of double standards which reduce confidence in the dialogue on human rights.

Secessionist Threat

Rise of Secessionist and Separatist Tendencies: As the Cold War ended and the "end of History" was predicted it was widely believed that international tensions would be reduced and stability restored. However, these hopes were belied as ethnic conflicts came to ravage different parts of the globe. The break up of States has become a global phenomenon and is no longer limited to any one region. It could be seen in the collapse of multinational federations like the Soviet Union and Yugoslavia and the rise of small States like Eritrea (1993). Earlier the forcible absorption of nationalities led to war; now the break up of States is creating tension.12 Secessionism has become the greatest destabiliser of regimes and the biggest challenge to peace. According to one view: "Secessionism has nothing to do with wars of independence." It is true that often the perception of a threat to an ethnic identity has led to a secessionist struggle. But, the origin of a secessionist movement need not always be ethnic. The desire to be separate and independent could have economic dimensions as well. "Certainly, oppressed nations still exist. But in the majority of cases, secessionist aspirations are rooted not in the frantic desire for freedom, but rather in the conviction that as times are hard, prosperity can be more easily obtained within a small entity than lost in the immensity of a greater conglomeration."13

In Europe, the end of the Cold War has seen the outbreak of ethnic conflicts. The Asia-Pacific is an anthropological cauldron of ethnic diversity. Ethnic, religious and cultural diversities in the Asia Pacific hold immense potential for turmoil. And as has been rightly said, the time to make peace is when there is peace. The economic crisis in East Asia, not surprisingly, has been accompanied by ethnic strife. The Chinese community in each of these countries who are often traders have become the internal enemies and are frequently demonised. Past experience has shown that any disturbance in any one of the Southeast Asian countries is capable of sparking off conflicts in neighbouring areas and creating regional instability.

Indonesia stands out as an important case study of how ethnic differences when they are accompanied by economic turmoil and unfulfilled political aspirations, can bring even strong pluralistic states down on their knees. Ethnic tensions have erupted in Indonesia threatening to tear apart the socio-political fabric of the nation. Indonesia witnessed the worst kind of mob violence against some communities. The Javanese constitute about 60 per cent of Indonesia’s population, but there are other ethnic communities including Malays and Madurese. It was widely feared 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).

There is a view that by allowing East Timor to slip away from its grasp the Indonesian Government has unwittingly encouraged separatist movements in other parts. It will have profound short and long term domestic political, social, economic and cultural implications for Indonesia, a widely dispersed nation with a multiethnic, heterogenous society. 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.14 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?

It is not enough to say that the majority in Indonesia are Muslims because the Muslim of Sumatra will be as different from the Muslim of Java as a Punjabi Sikh is from a Tamil Sikh. Both Hinduism and Islam were introduced in Indonesia from India. But the animist tradition among the Balinese Hindus is still strong.

Other Asian States with multi-ethnic societies are similarly confronted with separatist movements (often with support from across the border accompanied by proliferation of small arms).15 While in opposition, Megawati Sukarnoputri of PDI-Struggle (Indonesian Democratic Party-Struggle) had objected to relinquishing hold over East Timor. She did not subscribe to the argument that it was too much of a burden on Indonesia and maintained that whatever happens East Timor is part of Indonesia.16 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 was definitely regarded as setting a wrong trend which could lead to the disintegration of the country.

Fissiparous Tendencies (Separatist Movements)

Three notoriously famous secessionist threats to Indonesian security have been in Aceh, West Irian and East Timor. The official pejorative for them is Geromblan Pengacau Keamanan (GPK, or Security Disturbance Bandit Groups).


President Wahid’s offhand declaration that Aceh would be permitted to have a referendum on its future (if East Timor could have one) raised hopes. He retracted his statement later (perhaps under pressure from the military and others) when he subsequently said that any referendum would be about autonomy and the imposition of Islamic law for Aceh, not independence.17 Threat of a breakup of Indonesia caused concern equally to the ASEAN leaders who at an informal summit spoke out in support of Indonesia’s territorial integrity even as Wahid reassured them. The Indonesian armed forces chief, Admiral Widodo spoke of pursuing a political solution, something that had never been tried in East Timor.

This province on the western tip of Indonesia was an independent sultanate until the late 19th century when it was conquered by the Dutch. Indonesia took it over at the time of declaration of its independence in 1945. According to Alagappa, though this province initially supported the Republic of Indonesia, it was political mishandling by Jakarta which led to its alienation.18 It became known for its radical Islamic tradition and for being fiercely independent-minded. The ‘Free Aceh’ movement was crushed with the help of the army and the imposition of martial law in 1989.

Table 11. Indonesia: Religions (Percentage)

Muslims 86.9

Christians 9.6

Hindus 1.9

Buddhists 1.0

Tribal religions 0.6

Source: The Far East and Australasia 2000.

There are religious, and socio-economic causes for the Aceh movement. At the religious level, the radical Acehnese look down upon the tolerant Islam being practised by the Javanese. An important economic grievance is that though Aceh has Indonesia’s largest LNG plant the fruits of this natural resource have not accrued to the province but to the central government. Aceh’s oil and gas fields have served as an important source of revenue for Jakarta.

The Government and the Free Aceh Movement (GAM) separatist rebels agreed on an accord for a three month humanitarian pause (which guarantees suspension of military action).19

Irian Jaya

Historical factors have made the Irian problem more difficult for Indonesia than Aceh. The western part of New Guinea island had been a part of the Netherlands East Indies but could not be integrated. The Dutch delayed the handing over of West Irian to Indonesia till 1962. They took advantage of West Papuan’s ethnic differences (who are Melanesians) with rest of Indonesia (dominated mostly by Malays). The Dutch had encouraged growth of nationalism in West Irian in order to thwart Indonesian takeover of West Irian. Indonesia initially named it Irian Barat. (West Irian) and later in 1972 it came to be called Irian Jaya (Victorious Irian). Under the terms of the UN agreement, an "Act of Free Choice" was to be conducted and Indonesia carried it out in a way that imposed Indonesian rule on them. The cause for resentment among the locals was that they feared demographic changes were taking place to their detriment and were losing their jobs to better educated and qualified people who came and settled there.

In 1965 a rebellion by the Organisasi Papua Merdeka (OPM, Free Papua Movement) erupted and in 1971 a Republic of West Papua was proclaimed under Gen. Seth J. Rumkorem and the unrest has continued.

The majority of West Irians are Melanesians and their religion is animistic or Christianity, as compared to the Indonesian majority of Malays and Muslims. However, the unrest in West Irian does not really have ethnic but socio-economic roots which is related to the central government’s policy of settling outsiders on the island and its economic exploitation.

East Timor

For the first time Jakarta raised the possibility of independence for East Timor in January 1999. President B.J. Habibie categorically stated on February 11, 1999: "We do not want to be burdened by the problem of East Timor as of January 1, 2000."20 East Timor (or Loro Sae province), half of an island 300 miles north of Australia, covers an area of about 14,874 sq km and a population of 830,000. Smaller in population and size than Hawaii, it is a tiny enclave. Roman Catholics constitute more than 60 per cent of it population. Since 1988 Bishop Belo reports directly to the Vatican and not to the national conference of Bishops. So he enjoys a greater degree of independence in religious matters than other Catholic representatives of Indonesia. East Timor comprises people of mixed Papuan, Malay, and European origin. They are physically very different in appearance from, say, the Javanese. Their language is Tetum (Tatum) which is a West Indonesian language with a Portuguese admixture. Muslim and other non-Timorese settlers since 1975 now constitute over 20 per cent of the population.

The Portuguese colonised East Timor in 1586. During the four centuries of colonial rule there was total neglect of East Timor. Though Indonesia did make substantial investment in infrastructure and schools, there was heavy immigration from neighbouring islands of Java, Bali and Sulawesi. This curtailed the employment opportunities for the youth and important posts came to be occupied by ‘outsiders’. The western half of Timor island formed part of the Dutch East Indies which became part of Indonesia in 1949. The General Assembly placed East Timor on the list of Non-Self Governing Territories in 1960. In 1974, the announcement by Portugal acknowledging East Timor’s right to self-determination, was followed by civil war between Frente Revolucionaria de Timor Leste Independente (FRETILIN) and two smaller parties—Uniao Democratic Timorense (UDT) and the Associacao Popular Democratica de Timor (APODETI). In August 1975, FRETILIN managed to get control of the colony formally and on November 28, 1975 it unilaterally declared the independence of the territory. The remaining parties proclaimed their integration with Indonesia. Various factors had inhibited Indonesia from taking a pro-active approach. It had earlier declared that its territorial claims were coterminous with the former Dutch Empire in Southeast Asia and therefore did not extend to Portuguese ruled East Timor. Moreover, Indonesia did not wish to be a source of anxiety for any of its neighbours. What Jakarta secretly did hope for was that one of the East Timor groups would overthrow the Portuguese rule and appeal for merger with Indonesia.21 Certain new developments provided just such an opportunity and on December 7, 1975 Indonesian troops landed in East Timor. Portugal reported this to the Security Council. In July 1976 it was formally integrated as the 27th province of Indonesia. Indonesia’s action in East Timor was cited as another instance of authoritarianism. Portugal reported this to the United Nations Security Council.

So, what went wrong in East Timor? Though Jakarta invested millions of dollars to build up East Timor’s infrastructure and education what got highlighted was the army excesses which accompanied it and what was perceived by its inhabitants as a centre-periphery kind of relationship. Since the Church articulated the aspirations of the people it gained in legitimacy and strength. Though Jakarta sought to appear even-handed the underlying motivation was read differently by the East Timorese. The occupation of East Timor was cited as an example of brutal repression—200,000 Timorese or approximately one-third of the population were said to have been killed in the process of integration.22 It has often been censured by human rights organisations like Amnesty International. For instance, in November 1991, Indonesian troops shot and killed 273 independence demonstrators outside the Santa Cruz cemetery in Dili. The UN never officially recognised East Timor as a part of Indonesia and several UN resolutions condemned the plight of the people of East Timor and demanded withdrawal of troops so that an act of self-determination under UN supervision could take place.

The referendum finally took place on August 30, 1999 in which about 98.5 per cent of the population participated and in which the East Timorese by an overwhelming vote rejected the autonomy proposal of Jakarta. As chaos followed the results, the peacekeeping troops, the International Force for East Timor (INTERNET) landed in the territory on September 20, 1999. By the end of the year the last of the Indonesian soldiers had left the territory and the process of reconstructing a new future had begun. East Timor has been the greatest diplomatic and political embarrassment for Indonesia. The threat it poses relates not only to the dismemberment of the country but to the very foundations on which it had hitherto been functioning. It has brought into question many ideas and institutions on which the Government had been functioning. Jakarta claims that it is committed to bring to book those responsible for human rights abuses in East Timor.23 The Indonesia Commission Investigating Human Rights Violations in East Timor (dubbed as KPP-HAM) submitted a report covering the period starting from January 1999 and a draft law on the establishment of a human rights court is being finalised. Some hope for the future was expressed in the visit of Xanana Gusmao to Jakarta in November 1999 and the visit of President Abdurrahman Wahid in February 2000 to the territory when an important agreement was reached concerning the establishment of an Indonesia-UNTAET Joint Commission to promote cooperation between the peoples of Indonesia and East Timor.

 Conflict Resolution Theorising

Though intra-state conflicts have proliferated theory building on the subject, especially ethnic conflict, has remained a neglected field of inquiry. The magnitude of the problem becomes even greater in pluralistic societies like Indonesia. The social sciences have looked at conflict from a variety of angles. Conflict issues have been examined from the standpoint of psychology, sociology, anthropology. This only reflects the heterogenous and pluralistic nature of societies.24 Marxist theorists have tended to bypass the pluralistic nature of societies, except in terms of class, and the importance of different ethnic groups. Ethnicity has sometimes been dismissed as mere "false consciousness" and the complexity of religion as the "opiate of the masses". It is unable to visualise the threat posed by religion as a source of conflict. It also has its limitations in explaining the role of nationalism.25 Liberal theory on the other hand, with its emphasis on the individual, underestimates the importance of group affiliations.26 Theorists also overemphasise the role of the State as an actor and neglect the role of non-state actors in conflicts. Intra-state conflicts and their linkages with low-intensity conflicts, spread of small arms and spread of drugs, and their transformation into inter-state conflicts have to be studied under a new theoretical framework. Social conflicts are seen to coincide with economic conflict and absence of adequate political and structural safeguards at times.

 Conflict Resolution and the Role of External Powers

As the world is increasingly becoming a global village events in one part of the globe intimately affect development in another part. This often brings up the dilemma of state sovereignty versus international intervention on grounds of human rights and democracy. Where does State sovereignty end and the right of the international community to intervene begin?27 When intra-state conflict spills over into the international arena or there is an attempt by various forces to intervene, at times a State witnessing ethnic conflict may attract international sanctions. This may receive monetary and moral support of non-resident nationals of that state. Second, in the case of an ethnic conflict, if the same ethnic community resides in a neighbouring State, there is a possibility of destabilisation there as well in case members of that community are mobilised, e.g. the Chinese community in Southeast Asia.


Intra-state conflicts and consequently conflict resolution mechanisms acquire an added significance in countries which have a pluralistic society. Theory-building in the context of intra-state conflict needs to be encouraged and nurtured. Indonesia (like many other SEA States) is faced with the practical problem of dealing with issues relating to economics, democracy and security. This has put existing institutions under pressure. For instance, within ASEAN there was a demand for breaking away with the traditional ASEAN-way of non-interference in the internal affairs of member states. In order for Indonesia to face up to the security challenges in the new millenium it may have to evolve a new theoretical framework and innovative new methods and techniques of conflict resolution to enable its people to address both issues of domestic and international security.



1. Udai Bhanu Singh, "Economic Crisis in East Asia", in Asian Strategic Review 1997-98, (New Delhi: IDSA, 1995).

2. John McBeth, "Return to Roots," Far Eastern Economic Review, June 4, 1998.

3. Paul J. Smith, "Food Security and Political Stability in the Asia-Pacific Region," APC Seminar Report, (Hawaii: The Asia-Pacific Center for Security Studies, February 1999).

4. BBC/SWB/FEW/0617, December 1, 1999.

5. "Wahid to let Megawati run government", The Times of India, August 10, 2000.

6. "Coup Fear in Indonesia", Jane’s Foreign Report, July 6, 2000.

7. These include: the Indonesian Democratic Party for Struggle (PDI-P) faction, the Reformist Golkar faction, the United Development Party (PPP) faction, the National Awakening Party (PKB) faction, the Reform faction, the Crescent Star Party (PKB) faction, United Ummat Sovereignty (PDU) faction, the Indonesian Nationhood faction, the Regional Representative faction, and the Indonesian National Military Police faction. (The last four factions won only less than ten seats each).

8. FE/3740, B/3, January 18, 2000.

9. J. Kristiadi, "The Armed Forces", in Richard W. Baker, M. Hadi Soesastro et. al., eds., Indonesia: The Challenge of Change, (Singapore: ISEAS, 1999).

10. Udai Bhanu Singh, "Political Turbulence in Indonessia", Strategic Analysis, September 1996, vol. 19, no. 6.

11. Clifford Geetz, "Indonesia Starting Over," The New York Review of Books, May 11, 2000.

12. Pascal Boniface "The Proliferation of Nation States," The Hindu, March 30, 1999.

13. Ibid.

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

15. See Montserrat Guibernau and John Rex, ed., The Ethnicity Reader: Nationalism, Multiculturalism and Migration (Cambridge: Polity Press, 1997).

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

17. International Herald Tribune, November 11, 1999.

18. Muthiah Alagappa, ed., Asian Security Practice: Material and Ideational Influences (Stanford: Stanford University Press, 1998).

19. "The Joint Committee on security modalities launched procedures on the three-month humanitarian pause", News from Indonesia, vol. I, no. 6, June 2000.

20. New Straits Times (Kuala Lumpur), February 12, 1999.

21. D.R. Sardesai, Southeast Asia: Past & Present (Boulder: Westview Press, 1994) Third edition.

22. According to one writer, "…not even Pol Pot succeeded in killing proportionately, as many Cambodians, as the Indonesian generals have killed East Timorese". See John Pilger, "Horror behind the West’s big wink", Guardian Weekly (Paris), February 27, 1994. The figure of 200,000 was first estimated by East Timor’s church while an Australian parliamentary committee referred to "at least 200,000" killed in a report in January 1994.

23. For details refer: Udai Bhanu Singh, "Indonesia’s Security Perspectives", Strategic Analysis, March 2000, vol. 23, no. 12. Also see "East Timor: Pebble in Indonesia’s Shoe", Strategic Analysis, September 1996.

24. International Encyclopaedia of the Social Sciences, vols. 3&4 (1968, Macmillan).

25. Kumar Rupesinghe, "Theories of Conflict Resolution and Their Applicability to Protracted Ethnic Conflicts," in Kumar Rupesinghe, ed., Ethnic Conflict and Human Rights (Oslo: Norwegian University Press, 1988).

26. Ibid.

27. RS Saini, "Is the right to self-determination relevant to Jammu & Kashmir?", Indian Journal of International Law, vol. 38, April 1998, no. 2, pp. 157-181.