Economic Coercion And U.s. Foreign Policy

Implications Of Case Studies From The Johnson Administration

Sidney Weintraub

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429724794
• Edition: 1
• Topic: Politik & Internationale Beziehungen
• Subtopic: Politik

Why do governments-and especially the U.S. government-so frequently attempt to use economic means to coerce other countries on a one-on-one basis when critics almost universally argue that such pressure rarely works? This question forms the basis of discussion for Professor Weintraub and seven graduate students at the Lyndon B. Johnson School of Pu

II
Case Studies

Case 1.
The United States and Indonesia: A Study of Economic Pressure—September 1963-October 1965

Jay Schenirer

Introduction

In September 1963, President Sukarno of Indonesia officially began a policy of Ganjung, or “Crush Malaysia,” as a response to the formation of the Federation of Malaysia.¹ This marked the beginning of a two-year deterioration of relations between the United States and Indonesia. The United States opposed the Ganjung policy; it had supported the creation of Malaysia in the United Nations and sought an end to the confrontation. Both Malaysia and Indonesia were important components of the United States’ defense against communism in Southeast Asia.² The United States had been supplying Indonesia with economic aid for ten years, and attempted, through both the threat of aid termination and the promise of future aid, to coerce Sukarno into negotiating a peaceful settlement with Malaysia.

This study examines U.S. policy in Indonesia from September 1963 until the attempted coup of October 1965. An attempt will be made to analyze U.S. policy in relation to both the political situation in Southeast Asia and the major political forces in Indonesia. The success or failure of the U.S. policy of implementing aid as a coercive tool is then discussed in relation to the above factors.

Background Information—Indonesia

In order to understand the cause of the deterioration in United States-Indonesian relations and the inability of the United States to bring sufficient pressure on Indonesia to end the Malaysian confrontation, it is necessary to comprehend the nature of the conflict between Indonesia and Malaysia.

Indonesian objections to the creation of the Federation of Malaysia began when President Sukarno first publicly rejected the idea on January 8, 1963. The Indonesian policy of konfrontasi, or confrontation, began soon after. In February, Indonesian infiltrators crossed the border into the Malaysian territory of Sarawak. Sukarno seemed to soften somewhat in April, agreeing to a conference in Manila to be attended by the foreign ministers of the Philippines, Indonesia, and Malaysia. By May, Sukarno and the Malaysian leader, Prince Abdul Rahman, were again “vying with each other to search for the most offensive epithets to hurl across the Java Sea.”³ In Tokyo later the same month, Sukarno met with Prince Abdul Rahman and established “cordial and personal relations.”⁴ In June, the concept of MAPHILINDO (Malaysia-Philippines-Indonesia) was established, consisting of a permanent arena for the settling of disagreements among the three countries. Publicly, Sukarno based his rejection of the establishment of Malaysia on a small uprising in Northern Borneo, citing it as evidence that not all of the peoples encompassed by the arbitrarily set boundaries of the Federation of Malaysia truly wished to become part of the state. In a summit meeting at the end of July, the foreign ministers of Indonesia and Malaysia agreed that United Nations Secretary General U Thant would send an envoy to Borneo to determine if those residents wanted to be included in the Federation. Further, the formal announcement of the formation of Malaysia, originally scheduled for August 31, 1963, would be postponed pending the results of the U.N. envoys mission. Some minor problems resulted with the personnel makeup of the U.N. mission—Indonesia complained that it wanted more Indonesian nationals to accompany the U.N. team.

On August 29, Prince Abdul Rahman announced that the Federation of Malaysia would formally come into existence on September 16. Sukarno charged the Malaysian leader with violating the Manila agreements. The Federation of Malaysia nevertheless came into being on the 16th. Sukarno immediately announced his Crush Malaysia policy and called on twenty-one million Indonesian volunteers to achieve this goal. He also severed all economic ties with Singapore, which up to that point, had been Indonesia’s primary trading partner and principal port.

At the end of September, the U.N. envoy determined that Borneo should in fact be included in the Federation. Sukarno, however, did not alter his stance; he was firmly committed to a policy that would dictate the direction of Indonesia’s foreign actions for almost two years.

Several theories have been advanced to explain Sukarno’s persistence in the policy of Crush Malaysia. President Sukarno, the undisputed leader of Indonesia since its independence in 1949, firmly believed that Indonesia maintained an inherent right and duty of exercising leadership in Southeast Asia. Because of its large size, population, abundant natural resources, and historical revolutionary path, Sukarno felt that Indonesia had the responsibility to lead the “New Emerging Forces” (NEFOS) of the developing world against the Old Established Forces” (OLDEFOS) of the industrialized colonialist world.

One theory bases Indonesian opposition to Malaysia on Sukarnos revolutionary ideology. For Sukarno, an immense “dialectical struggle between the old capitalist states and the new evolving states” was unfolding.⁵ He considered Neokolim (his word for colonialism, neocolonialism, and imperialism) to be the “source of all tension in the world.”⁶ Indonesia had defeated the Dutch to gain its independence. Now Britain was granting independence to Malaysia. However, Sukarno felt the Malaysian independence was nothing more than a front for British economic colonization. Since Indonesia’s borders had been colonially determined, Sukarno felt that Indonesia had as much political right as any other nation to control Sarawak and Sabah. The British were thus, in his view, usurping Indonesian rights concerning the Malaysian territory. His attitude was evident as early as 1945 when he said that “although there is the danger of my being called an imperialist, Indonesia will not become strong and secure unless the whole Straits of Malacca is in our hands.”⁷

The American Ambassador to Indonesia, Howard Jones, believed that Sukarnos emotionalism and preoccupation with colonial issues “affected him like a drug” and would often lead to an “irrational course of action.”⁸ Jones felt Sukarno was

ready to fight for people’s freedom anywhere, at any time; he was highly suspicious of British motivation; he saw a permanent threat to Indonesian influence in a non-Indonesian Borneo, a contiguous territory where he felt his nation had legitimate concerns. I am convinced that Sukarno simply could not believe that people in Borneo would prefer identification with what he saw as British dominated Malaysia to independence or even affiliation with Indonesia.⁹

These beliefs were intensified by the small anti-Malaysian uprising in Northern Borneo.

The final aspect of the revolutionary ideology theory is that Sukarno believed that among the peoples of the NEFOS, there existed a “psychological need for self-respect felt by a political elite long-humiliated by colonialism.”¹⁰ According to presidential assistant Subandrio, Indonesians “were made to feel inferior” during the colonial period.¹¹

President Sukarno is now trying to revive the iron spirit of the people, to give them confidence. We need technological knowledge but first the spirit must be revived… we are neglecting our wealth purposely because we are concentrating on nation building. Because of the natural wealth of Indonesia, we can afford not to give priority to economic problems.¹²

Self-respect would come not by insuring Indonesian independence, but by fighting and defeating the Neokolim forces throughout the world. In this context, the Crush Malaysia policy was not an act of war aimed at another nation but rather an arm of the revolution striking out at a neocolonialist state in an attempt to ensure the independence of its people.

In a 1969 speech, Subandrio made this statement:

Indonesian foreign policy is correctly regarded as an instrument of the Indonesian revolution, but at the same time the foreign policy must safeguard the revolution, must carry out the objectives of the revolution in the international sphere, and must try to ensure that the revolution is not obstructed from without.¹³

He had previously claimed, “we are not aggressors since Malaysia is not in existence.”¹⁴

The second theory of causality stems from the domestic power struggle within Indonesia. In some respects, each of the three major political forces in Indonesia (the Communist Party, the military, and Sukarno) could benefit by the continuation of the Crush Malaysia policy.

The Indonesian Communist Party (PKI), headed by Aidit, claimed to have three million members in 1964. According to one CIA report, the PKI could effectively mobilize approximately ten to twelve million people. Three cabinet ministers were members of the PKI and three other ministers were procommunist.¹⁵ The PKI was a nonviolent party seeking access to power through infiltration of the government as well as by mobilization of the masses. It sought to be identified as a national or nationalist movement by avoiding the appearance of association with international communism. Through advocacy of the Crush Malaysia policy, the PKI attempted to accomplish three goals: first, to create tension and possibly cause a break in Indonesian-U.S. relations; second, to hinder economic development in Indonesia; and third, to strengthen its own claim as an indispensable component of the Indonesian polic...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Preface
• Acknowledgements
• I Theory and Analysis
• II Case Studies
• Index