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| Indonesia's powerful ministers known as Berkeley Mafia |
Armed with Sadli's January 10, 1967, investment law, the
economists could put on their old school ties and play host to the lords of the
great American corporations. In August the Stanford Research Institute - a
spin-off of the university-military-industrial complex - brought 170
"senior executives" to Djakarta for a three-day parley and
look-see.
"The Indonesians have cut out the cancer that was destroying their
economy," an SRI executive later reported approvingly. Then, urging that
big business invest heavily in Suharto's future, he warned that "military
solutions are infinitely more costly."
In
November, Malik, Sadli, Salim, Selosoemardjan and the
Sultan met in Geneva with a select list of American and European
businessmen flown in by Time-Life. Surrounded by his economic advisors, the
Sultan ticked off the selling-points of the New Indonesia - "political
stability ... abundance of cheap labor . . . vast potential market ..
. treasure house of resources."
The universities, he added, have produced a "large number of
trained individuals who will be happy to serve in new economic
enterprises."
David Rockefeller, chairman of the Chase Manhattan Bank, thanked
Time-Life for the chance to get acquainted with "Indonesia's top economic
team." He was impressed, he said, by their "high quality of
education."
Harvard: Bringing it all back home
"We couldn't have drawn up a more ideal scenario than what
happened. All of those people simply moved into the government and took over
the management of economic affairs, and then they asked us to
continue working with them." –
Gus Papanek, Chief of the Harvard Development Advisory Service
To some extent, we are witnessing the return of the pragmatic outlook
which was characteristic of the PSI-Masjumi coalition of the early Fifties
when Sumitro ... dominated the scene," observed a well-placed
insider in 1966.
In June 1968 Suharto organized an impromptu reunion for the class of
Ford, known in Djakarta as the "Berkeley Mafia."
As Minister of Trade and Commerce he appointed
Dean Sumitro (PhD, Rotterdam); as Chairman of the National Planning
Board he appointed Widjojo (PhD, Berkeley, 1961) ; as Vice Chairman,
Emil Salim (PhD. Berkeley, 1964); as Secretary General of Marketing
and Trade Research, Subroto (Harvard, 1964); as Minister of Finance,
Ali Wardhana (PhD, Berkeley, 1962) ; as Chairman of the Technical
Team of Foreign Investment, Mohamed Sadli (MS, MIT.
1956); as Secretary General of Industry, Barli Halim (MBA,
Berkeley, 1959). "Koko" Soedjatmoko, who had been functioning as
Malik's advisor, became ambassador in Washington.
"We consider that we were training ourselves for
this," Sadli told a reporter from Fortune - "a
historic opportunity to fix the course of events." To make the most of the
opportunity, Ford provided the Indonesians with a post-graduation present - a
development team from Harvard.
Since 1954, Harvard's Development Advisory Service (DAS), the
Ford-funded elite corps of international modernizers, had brought Ford
influence to the national planning agencies
of Pakistan, Greece, Argentina, Liberia, Colombia, Malaysia andGhana.
Officially the Harvard-DAS Indonesia project began July 1,
1968. But DAS head Gus Papanek had people in the field well
before that, joining with AID's Cal Cowles in bringing back the
old Indonesia hands of the '50s and '60s.
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| "Ko Ko" Soedjatmoko. |
The Harvard people are "advisors," explains DAS Deputy
Director Lester Gordon - "foreign advisors who don't have to deal with all
the paperwork and have time to come up with new ideas."
They work "as employees of the government would," he says,
"but in such a way that it doesn't get out that the foreigners are doing
it." Indiscretions got them bounced from Pakistan. "We stay in
the background."
They stayed in the background for the five-year plan. In the winter of
1967-68, a good harvest and a critical infusion of U.S. "Food
for Peace" rice had kept prices down, cooling the political situation for
a time.
Hollinger, the DAS's first full-time man on the scene, arrived in March
and helped the economists lay out the plan's strategy. As the other DAS
technocrats arrived, they went to work on its planks.
"Did we cause it, did the Ford Foundation cause it, did the Indonesians cause it?" asks AID's Cal Cowles rhetorically. "I don't know."
The plan went into force without fanfare in January 1969. With its key
elements being foreign investments and agricultural self-sufficiency, it is a
late-20th Century American "development" plan that
sounds suspiciously like the mid-19th century Dutch colonial strategy.
Then, Indonesian labor - often corvee - substituted for
Dutch capital in building the roads and digging the irrigation ditches
necessary to create a plantation economy for Dutch capitalists, while a
"modern" agricultural technology increased the output of Javanese
paddies to keep pace with the expanding population. The plan brought an
industrial renaissance to the Netherlands, but only an expanding misery
to Indonesia.
As in the Dutch strategy, the Ford scholars' five-year plan introduces a
"modern" agricultural technology - the so-called "green
revolution" of high-yield hybrid rice - to keep pace with Indonesian rural
population growth and to avoid "explosive" change in
Indonesian social - i.e., class - relationships.
The agricultural plan is being implemented by the central government's
agricultural extension service, whose top men were trained by
a University of Kentucky program at the Bogor Agricultural
Institute.
In effect, the agricultural agents have been given a monopoly in the
sale of seed and the buying of rice, which puts them in a natural alliance with
the local military commanders - who often control the rice transport business -
and the local santri landlords whose higher returns are being
used to quickly expand their holdings.
The peasants find themselves on the short end of the stick, but if they
raise a ruckus they are sabotaging a national program and must be PKI agents,
and the soldiers are called in.
The Indonesian ruling class, observes Dutch scholar Wertheim,
is now "openly waging [its] own brand of class struggle." It is a
struggle the Harvard technocrats must "modernize."
Economically the issue is Indonesia's widespread unemployment;
politically it is Suharto's need to legitimize his power through elections.
"The government ... will have to do better than just avoiding chaos if
Suharto is going to be popularly elected," Papanek reported in
October 1968: "A really widespread public works program, financed by
increased imports of PL480 ["Food for Peace"] commodities sold
at lower prices, could provide quick economic and political benefits in the
countryside."
Harvard is pushing its Indonesian New Deal with a "rural
development" program that will further strengthen the hand
of the local Army commanders. Supplying funds meant for labor-intensive public
works, the program is supposed to increase local autonomy by working through
local authorities.
The money will merely line military pockets. DAS
Director Papanek admits that the program is "civilian only in a
very broad sense. because many of the local administrators are
military people." And the military has two very large, and
rather cheap, labor forces which are already at work in "rural
development."
One is the 300,000-man Army itself. The other is composed of the 120,000
political prisoners still being held after the Army's 1965-1966 anti-Communist
sweeps. Some observers estimate there are twice as
many prisoners, most of whom the Army admits were not PKI members,
though they fear they may have become Communists in the
concentration camps.
Despite the abundance of "Food for Peace" rice for other
purposes, there is none for the prisoners, for whom the government's
daily food expenditure is slightly more than a penny.
In Java the Army uses the prisoners in public works. Australian
professor Herbert Feith was shown around one Javanese town in 1968
where prisoners had built the prosecutor's house, the high school,
the mosque, and (in process) the Catholic church. "It is not really hard
to get work out of them if you push them," he was told.
Just as they are afraid and unwilling to free the prisoners, so the
generals are afraid to demobilize the troops. "You can't add to
the unemployment," explained an Indonesia desk man at the State
Department. "especially with people who know how to shoot a
gun." Consequently, the troops are being worked more and more into the
infrastructure labor force - to which the Pentagon is
providing roadbuilding equipment and advisors.
But is it the foreign investment plank of the five-year plan that is the
pay-off of Ford's 20-year-long strategy in Indonesia and the
pot of gold that the Ford modernizers - both American and
Indonesian - are paid to protect.
The 19th century Colonial Dutch strategy built an agricultural export
economy. But the Americans are interested primarily in resources, mainly
mineral.
Freeport Sulphur will mine copper on West Irian.
Inter-national Nickel has got the Celebes' nickel. Alcoa is negotiating
for most of Indonesia's bauxite. Weyerhaeuser. Inter-national
Paper. Boise-Cascade and Japanese. Korean and Filipino
lumber companies will cut down the huge tropical forests
of Sumatra, West Irian and Kalimantan (Borneo).
Another unmined resource is Indonesia's 120 million
inhabitants - half of the people in Southeast Asia. "Indonesia today,"
boasts a California electronics manufacturer now operating his
assembly lines in Djakarta, "has the world's largest untapped pool of
capable assembly labor at a modest cost." The cost is ten
cents a day.
But the real prize is oil. During one week in 1969, 23 companies, 19 of
them American, bid for the right to explore and bring to market the oil beneath
the Java Sea and Indonesia's other coastal waters.
In one 21,000-square-mile concession off Java's northeast
coast, Natomas and Atlantic-Richfield are already bringing in oil.
Other companies with contracts signed have watched their stocks soar in
speculative orgies rivaling those following the Alaskan North Slope
discoveries.
Ford, like an over-attentive mother. is sponsoring a
new Berkeley project at the U.C. law school in "developing human
resources for the handling of negotiations with foreign investors
in Indonesia."
Meanwhile in Indonesia, the "chaos" that Ford and its
modernizers are forever preventing is once more gathering force. Late last
year, troops from West Java's crack Siliwangi division
rounded up 5000 surprised and sullen villagers in an odd military exercise that
speaks more of Suharto's fears than of Indonesia's political
"stability."
But the Army got no cheers as it passed through the villages, an
Australian reporter wrote. "To an innocent eye from another planet it
would have seemed that the Siliwangi division was an army of
occupation."
There is no more talk about land reform or arming the people
in Indonesia now. But the silence is eloquent. In the Javanese
villages where the PKI was strong before the pogrom, now landlords and officers
fear going out after dark. Those who do so are sometimes found in the morning
with their throats cut. The generals mutter about "night PKI."
(David Ransom, a member of the Pacific Studies Center, is currently at
work on a book on Indonesia. His views do not necessarily
represent those of the Center.)
