Author's note: Much of the material appearing in this article was gathered in numerous personal interviews
conducted between May 1968 and June 1970. The interviews were with a broad range of past and present members of
the State Department and the Ford Foundation, faculty members at Harvard, Berkeley, Cornell, Syracuse, and the
University of Kentucky, and Indonesians both supporting and opposing the Suharto government. Where possible, their
names appear in the text. Other information in the article is derived from a wide reading of the available literature
on the history and politics of Indonesia. Consequently, only those items are footnoted which directly quote or
paraphrase a printed source.
In the early sixties, Indonesia was a dirty word in the world of capitalist development. Expropriations, confiscations
and rampant nationalism led economists and businessmen alike to fear that the fabled riches in the Indies -- oil,
rubber and tin -- were all but lost to the fiery Sukarno and the twenty million followers of the Peking-oriented
Indonesian Communist Party (PKI).
Then, in October 1965, Indonesia's generals stepped in, turned their counterattack against an unsuccessful colonels'
coup into an anti-communist pogrom, and opened the country's vast natural resources to exploitation by American
corporations. By 1967, Richard Nixon was describing Indonesia as "the greatest prize in the Southeast Asian
area."1 If Vietnam has been the major postwar defeat for an expanding American empire, this turnabout in nearby
Indonesia is its greatest single victory.
Needless to say, the Indonesian generals deserve a large share of credit for the American success. But standing
at their side and overseeing the great give-away was an extraordinary team of Indonesian economists, all of them
educated in the United States as part of a twenty year strategy by the world's most powerful private aid agency,
the billion-dollar Ford Foundation.
But the strategy for Indonesia began long before the Ford Foundation turned its attention to the international
Following Japan's defeat in World War II, revolutionary movements swept Asia, from India to Korea, from China
to the Philippines. Many posed a threat to America's well-planned Pax Pacifica. But Indonesian nationalists, despite
tough resistance to the postwar invasion by Holland in its attempt to resume rule over the Indies, never carried
their fight into a full-blown people's war. Instead, leaders close to the West won their independence in Washington
offices and New York living rooms. By 1949 the Americans had persuaded the Dutch to take action before the Indonesian
revolution went too far, and then to learn to live with nationalism and like it. American diplomats helped draft
an agreement that gave Indonesians their political independence, preserved the Dutch economic presence, and swung
wide the Open Door to the new cultural and economic influence of the United States.
Among those who handled the diplomatic maneuvers in the U.S. were two young Indonesian aristocrats -- Soedjatmoko
(many Indonesians have only one name) and Sumitro Djojohadikusumo, an economist with a Ph.D. from Holland. Both
were members of the upper-class, nominally socialist PSI, one of the smaller and more Western-oriented of Indonesia's
myriad political parties.
Distressed by the specter of Sukarno and the strong left wing of the Indonesian independence forces, the American
Establishment found the bland nationalism offered by Soedjatmoko and Sumitro a most comfortable alternative. The
Marshall Plan strategy for Europe depended on "the availability of the resources of Asia," Soedjatmoko
told a New York audience, and he offered them an Indonesia open to "fruitful cooperation with the West."2
At the Ford Foundation-funded School of Advanced International Studies in Washington in early 1949, Sumitro explained
that his kind of socialism included "free access" to Indonesian resources and "sufficient incentives"
for foreign corporate investment.3
When independence came later that year, Sumitro returned to Djakarta to become minister of trade and industry (and
later minister of finance and dean of the faculty of economics at the University of Djakarta). He defended an economic
"stability" that favored Dutch investments and, carefully eschewing radicalism, went so far as to make
an advisor of Hjalmar Schacht, economic architect of the Third Reich.
Sumitro found his support in the PSI and their numerically stronger "modernist" ally, the Masjumi Party,
a vehicle of Indonesia's commercial and landowning santri Moslems. But he was clearly swimming against the tide.
The Communist PKI, Sukarno's Nationalist PNI, the Army, the orthodox Moslem NU -- everybody, in fact, but the PSI
and Masjumi -- were riding the wave of postwar nationalism. In the 1955 national elections -- Indonesia's first
and last -- the PSI polled a minuscule fifth place. It did worse in the local balloting of 1957, in which the Communist
PKI emerged the strongest party.
Nevertheless, when Sukarno began nationalizing Dutch holdings in 1957, Sumitro joined Masjumi leaders and dissident
Army commanders in the Outer Islands Rebellion, supported briefly by the CIA. It was spectacularly unsuccessful.
From this failure in Sumatra and the Celebes, Sumitro fled to exile and a career as government and business consultant
in Singapore. The PSI and the Masjumi were banned.
America's Indonesian allies had colluded with an imperialist power to overthrow a popularly elected nationalist
government, headed by a man regarded as the George Washington of his country -- and they had lost. So ruinously
were they discredited that nothing short of a miracle could ever restore them to power.
That miracle took a decade to perform, and it came outside the maneuvers of diplomacy, the play of party politics,
even the invasion of American troops. Those methods, in Indonesia and elsewhere, had failed. The miracle came instead
through the hallowed halls of academe, guided by the noble hand of philanthropy.
Education had long been an arm of statecraft, and it was Dean Rusk who spelled out its function in the Pacific
in 1952, just months before resigning as Assistant Secretary of State for Far Eastern Affairs to head up the Rockefeller
Foundation. "Communist aggression" in Asia required not only that Americans be trained to combat it there,
but "we must open our training facilities for increasing numbers of our friends from across the Pacific."4
The Ford Foundation, under the presidency of Paul Hoffman (and working closely with the Rockefeller Foundation),
moved quickly to apply Rusk's words to Indonesia. As head of the Marshall Plan in Europe, Hoffman had helped to
arrange Indonesian independence by cutting off aid funds to Dutch counterinsurgency and by threatening a total
cutoff in aid to the Dutch. As the United States supplanted the Dutch, Hoffman and Ford would work through the
best American universities -- MIT, Cornell, Berkeley, and finally Harvard -- to remold the old Indonesian hierarchs
into modern administrators, trained to work under the new indirect rule of the Americans. In Ford's own jargon,
they would create a "modernizing elite."
"You can't have a modernizing country without a modernizing elite," explains the deputy vice-president
of Ford's international division, Frank Sutton. "That's one of the reasons we've given a lot of attention
to university education." Sutton adds that there's no better place to find such an elite than among "those
who stand somewhere in social structures where prestige, leadership, and vested interests matter, as they always
Ford launched its effort to make Indonesia a "modernizing country" in 1954 with field projects from MIT
and Cornell. The scholars produced by these two projects -- one in economics, the other in political development
-- have effectively dominated the field of Indonesian studies in the United States ever since. Compared to what
they eventually produced in Indonesia, however, this was a fairly modest achievement. Working through the Center
for International Studies (the CIA-sponsored brainchild of Max Millikan and Walt W. Rostow), Ford sent out a team
from MIT to discover "the causes of economic stagnation in Indonesia." An interesting example of the
effort was Guy Pauker's study of "political obstacles" to economic development, obstacles such as armed
In the course of his field work, Pauker got to know the high-ranking officers of the Indonesian Army rather well.
He found them "much more impressive" than the politicians. "I was the first who got interested in
the role of the military in economic development," Pauker says. He also got to know most of the key civilians:
"With the exception of a very small group," they were "almost totally oblivious" of what Pauker
called modern development. Not surprisingly, the "very small group" was composed of PSI aristocrat-intellectuals,
particularly Sumitro and his students.
Sumitro, in fact, had participated in the MIT team's briefings before they left Cambridge. Some of his students
were also known by the MIT team, having attended a CIA-funded summer seminar run at Harvard each year by Henry
Kissinger. One of the students was Mohammed Sadli, son of a well-to-do santri trader, with whom Pauker became good
friends. In Djakarta, Pauker struck up friendships with the PSI clan and formed a political study group among whose
members were the head of Indonesia's National Planning Bureau, Ali Budiardjo, and his wife Miriam, Soedjatmoko's
Rumanian by birth, Pauker had helped found a group called "Friends of the United States" in Bucharest
just after the Second World War. He then came to Harvard, where he got his degree. While many Indonesians have
charged the professor with having CIA connections, Pauker denies that he was intimate with the CIA until 1958,
after he joined the RAND Corporation. Since then, it is no secret that he briefs and is briefed by the CIA, the
Pentagon, and the State Department. Highly placed Washington sources say he is "directly involved in decision-making."
In 1954 -- after the MIT team was in the field -- Ford grubstaked a Modern Indonesia Project at Cornell. With
an initial $224,000 and periodic replenishments, program chairman George Kahin built the social science wing of
the Indonesian studies establishment in the United States. Even Indonesian universities must use Cornell's elite-oriented
studies to teach post-Independence politics and history.
Among the several Indonesians brought to Cornell on Ford and Rockefeller grants, perhaps the most influential is
sociologist-politician Selosoemardjan. Right-hand man to the Sultan of Jogjakarta, Selosoemardjan is one of the
strong-men of the present Indonesian regime.
Kahin's political science group worked closely with Sumitro's Faculty of Economics in Djakarta. "Most of the
people at the university came from essentially bourgeois or bureaucratic families," recalls Kahin. "They
knew precious little of their society." In a "victory" which speaks poignantly of the illusions
of well-meaning liberals, Kahin succeeded in prodding them to "get their feet dirty" for three months
in a village. Many would spend four years in the United States.
Together with Widjojo Nitisastro, Sumitro's leading protégé, Kahin set up an institute to publish
the village studies. It has never amounted to much, except that its American advisors helped Ford maintain its
contact in the most difficult of the Sukarno days.
Kahin still thinks Cornell's affair with Ford in Indonesia "was a fairly happy marriage" -- less for
the funding than for the political cover it afforded. "AID funds are relatively easy to get," he explains.
"But certainly in Indonesia, anybody working on political problems with [U.S.] government money during this
period would have found their problem much more difficult."
One of the leading academic Vietnam doves, Kahin has irritated the State Department on occasion, and many of his
students are far more radical than he. Yet for most Indonesians, Kahin's work was really not much different from
Pauker's. One man went on to teach-ins, the other to RAND and the CIA. But the consequences of their nation-building
efforts in Indonesia were much the same.
MIT and Cornell made contacts, collected data, built up expertise. It was left to Berkeley to actually train most
of the key Indonesians who would seize government power and put their pro-American lessons into practice. Dean
Sumitro's Faculty of Economics provided a perfect academic boot camp for these economic shock troops.
To oversee the project, Ford President Paul Hoffman tapped Michael Harris, a one-time CIO organizer who had headed
Marshall Plan programs under Hoffman in France, Sweden, and Germany. Harris had been on a Marshall Plan survey
in Indonesia in 1951, knew Sumitro, and before going out was extensively briefed by Sumitro's New York promoter,
Robert Delson, a Park Avenue attorney who had been Indonesia's legal counsel in the United States since 1949. Harris
reached Djakarta in 1955 and set out to build Dean Sumitro a broad new Ford-funded graduate program in economics.
This time the professional touch and academic respectability were to be provided by Berkeley. The Berkeley team's
first task was to replace the Dutch professors, whose colonial influence and capitalist economics Sukarno was trying
to phase out. The Berkeley team would also relieve Sumitro's Indonesian junior faculty so that Ford could send
them back to Berkeley for advanced credentials. Sadli was already there, sharing a duplex with Pauker, who had
come to head the new Center for South and Southeast Asian Studies. Sumitro's protégé Widjojo led
the first crew out to Berkeley.
While the Indonesian junior faculty studied American economics in Berkeley classrooms, the Berkeley professors
turned the Faculty in Djakarta into an American-style school of economics, statistics, and business administration.
Sukarno objected. At an annual lecture to the Faculty, team member Bruce Glassburner recalls, Sukarno complained
that "all those men can say to me is 'Schumpeter and Keynes.' When I was young I read Marx." Sukarno
might grumble and complain, but if he wanted any education at all he would have to take what he got. "When
Sukarno threatened to put an end to Western economics," says John Howard, long-time director of Ford's International
Training and Research Program, "Ford threatened to cut off all programs, and that changed Sukarno's direction."
The Berkeley staff also joined in the effort to keep Sukarno's socialism and Indonesian national policy at bay.
"We got a lot of pressure through 1958-1959 for 'retooling' the curriculum," Glassburner recalls. "We
did some dummying-up, you know -- we put 'socialism' into as many course titles as we could -- but really tried
to preserve the academic integrity of the place."
The project, which cost Ford $2.5 million, had a clear, and some times stated, purpose. "Ford felt it was
training the guys who would be leading the country when Sukarno got out," explains John Howard.
There was little chance, of course, that Sumitro's minuscule PSI would outdistance Sukarno at the polls. But "Sumitro
felt the PSI group could have influence far out of proportion to their voting strength by putting men in key positions
in government," recalls the first project chairman, a feisty Irish business professor named Len Doyle.
When Sumitro went into exile, his Faculty carried on. His students visited him surreptitiously on their way to
and from the United States. Powerful Americans like Harry Goldberg, a lieutenant of labor boss Jay Lovestone (head
of the CIO's international program), kept in close contact and saw that Sumitro's messages got through to his Indonesian
friends. No dean was appointed to replace him; he was the "chairman in absentia."
All of the unacademic intrigue caused hardly a ripple of disquiet among the scrupulous professors. A notable
exception was Doyle. "I feel that much of the trouble that I had probably stemmed from the fact that I was
not as convinced of Sumitro's position as the Ford Foundation representative was, and, in retrospect, probably
the CIA," recalls Doyle.
Harris tried to get Doyle to hire "two or three Americans who were close to Sumitro." One was an old
friend of Sumitro's from the MIT team, William Hollinger. Doyle refused. "It was clear that Sumitro was going
to continue to run the Faculty from Singapore," he says. But it was a game he wouldn't play. "I felt
that the University should not be involved in what essentially was becoming a rebellion against the government,"
Doyle explains, "whatever sympathy you might have with the rebel cause and the rebel objectives."
Back home, Doyle's lonely defense of academic integrity against the political pressures exerted through Ford was
not appreciated. Though he had been sent there for two years, Berkeley recalled him after one. "He tried to
run things," University officials say politely. "We had no choice but to ship him home." In fact,
Harris had him bounced. "In my judgment," Harris recalls, "there was a real problem between Doyle
and the Faculty."
One of the younger men who stayed on after Doyle was Ralph Anspach, a Berkeley team member now teaching college
in San Francisco. Anspach got so fed up with what he saw in Djakarta that he will no longer work in applied economics.
"I had the feeling that in the last analysis I was supposed to be a part of this American policy of empire,"
he says, "bringing in American science, and attitudes, and culture ... winning over countries -- doing this
with an awful lot of cocktails and high pay. I just got out of the whole thing."
Doyle and Anspach were the exceptions. Most of the academic professionals found the project -- as Ford meant it
to be -- the beginning of a career."This was a tremendous break for me," explains Bruce Glassburner,
project chairman from 1958 to 1961. "Those three years over there gave me an opportunity to become a certain
kind of economist. I had a category -- I became a development economist -- and I got to know Indonesia. This made
a tremendous difference in my career."
Berkeley phased its people out of Djakarta in 1961-62. The constant battle between the Ford representative and
the Berkeley chairman as to who would run the project had some part in hastening its end. But more important, the
professors were no longer necessary, and were probably an increasing political liability. Sumitro's first string
had returned with their degrees and resumed control of the school.
The Berkeley team had done its job. "Kept the thing alive," Glassburner recalls proudly. "We plugged
a hole ... and with the Ford Foundation's money we trained them forty or so economists." What did the University
get out of it? "Well, some overhead money, you know." And the satisfaction of a job well done.
In 1959 Pauker set out the lessons of the PSI's electoral isolation and Sumitro's abortive Outer Islands Rebellion
in a widely read paper entitled "Southeast Asia as a Trouble Area in the Next Decade." Parties like the
PSI were "unfit for vigorous competition" with communism, he wrote. "Communism is bound to win in
Southeast Asia ... unless effective countervailing power is found." The "best equipped" countervailing
forces, he wrote, were "members of the national officer corps as individuals and the national armies as organizational
From his exile in Singapore, Sumitro concurred, arguing that his PSI and the Masjumi party, which the Army had
attacked, were really the Army's "natural allies." Without them, the Army would find itself politically
isolated, he said. But to consummate their alliance "the Sukarno regime must be toppled first." Until
then, Sumitro warned, the generals should keep "a close and continuous watch" on the growing and powerful
Communist peasant organizations. Meanwhile, Sumitro's Ford-scholar protégés in Djakarta began the
necessary steps toward a rapprochement.
Fortunately for Ford and its academic image there was yet another school at hand: SESKOAD, the Army Staff and Command
School. Situated seventy miles southeast of Djakarta in cosmopolitan Bandung, SESKOAD was the Army's nerve center.
There, generals decided organizational and political matters; there, senior officers on regular rotation were "upgraded"
with manuals and methods picked up during training in Fort Leavenworth, Kansas.
When the Berkeley team phased itself out in 1962, Sadli, Widjojo and others from the Faculty began regular trips
to Bandung to teach at SESKOAD. They taught "economic aspects of defense," says Ford's Frank Miller,
who replaced Harris in Djakarta. Pauker tells a different story. Since the mid-'50s, he had come to know the Army
General staff rather well, he explains, first on the MIT team, then on trips for RAND. One good friend was Colonel
Suwarto (not to be confused with General Suharto), the deputy commander of SESKOAD and a 1959 Fort Leavenworth
graduate. In 1962, Pauker brought Suwarto to RAND.
Besides learning "all sorts of things about international affairs" while at RAND, Pauker says, Suwarto
also saw how RAND "organizes the academic resources of the country as consultants." According to Pauker,
Suwarto had "a new idea" when he returned to Bandung. "The four or five top economists became 'cleared'
social scientists lecturing and studying the future political problems of Indonesia in SESKOAD."
In effect, this group became the Army's high-level civilian advisors. They were joined at SESKOAD by other PSI
and Masjumi alumni of the university programs -- Miriam Budiardjo from Pauker's MIT study group, and Selosoemardjan
from Kahin's program at Cornell, as well as senior faculty from the nearby Bundung Institute of Technology, where
the University of Kentucky had been "institution-building" for AID since 1957.
The economists were quickly caught up in the anti-communist conspiracy directed at toppling the Sukarno regime
and encouraged by Sumitro from his Singapore exile. Lieutenant General Achmad Yani, Army commander-in-chief, had
drawn around him a "brain trust" of generals. It was an "open secret," says Pauker, that Yani
and his brain trust were discussing "contingency plans" which were to "prevent chaos should Sukarno
die suddenly." The contribution of Suwarto's mini-RAND, according to Colonel Willis G. Ethel, U.S. defense
attaché in Djakarta and a close confidant of Commander-in-Chief Yani and others of the Army high command,
was that the professors "would run a course in this contingency planning."
Of course, the Army planners were worried about "preventing chaos." They were worried about the PKI.
"They weren't about to let the Communists take over the country," Ethel says. They also knew that there
was immense popular support for Sukarno and the PKI and that a great deal of blood would flow when the showdown
Other institutions joined the Ford economists in preparing the military. High-ranking Indonesian officers had begun
U.S. training programs in the mid-'50s. By 1965 some four thousand officers had learned big-scale army command
at Fort Leavenworth and counterinsurgency at Fort Bragg. Beginning in 1962, hundreds of visiting officers at Harvard
and Syracuse gained the skills for maintaining a huge economic, as well as military, establishment, with training
in everything from business administration and personnel management to air photography and shipping.6 AID's "Public
Safety Program" in the Philippines and Malaya trained and equipped the Mobile Brigades of the Indonesian military's
fourth arm, the police.
While the Army developed expertise and perspective -- courtesy of the generous American aid program -- it also
increased its political and economic influence. Under the martial law declared by Sukarno at the time of the Outer
Islands Rebellion, the Army had become the predominant power in Indonesia. Regional commanders took over provincial
governments -- depriving the Communist PKI of its plurality victories in the 1957 local elections. Fearful of a
PKI sweep in the planned 1959 national elections, the generals prevailed on Sukarno to cancel elections for six
years. Then they moved quickly into the upper reaches of Sukarno's new "guided democracy," increasing
the number of ministries under their control right up to the time of the coup. Puzzled by the Army's reluctance
to take complete power, journalists called it a "creeping coup d'état."7
The Army also moved into the economy, first taking "supervisory control," then key directorships of the
Dutch properties that the PKI unionists had seized "for the people" during the confrontation over West
Irian in late 1957. As a result, the generals controlled plantations, small industry, state-owned oil and tin,
and the state-run export-import companies, which by 1965 monopolized government purchasing and had branched out
into sugar milling, shipping, and distribution.
Those high-ranking officers not born into the Indonesian aristocracy quickly married in, and in the countryside
they cemented alliances -- often through family ties -- with the santri Moslem landowners who were the backbone
of the Masjumi Party. "The Army and the civil police," wrote Robert Shaplen of the New York Times, "virtually
controlled the whole state apparatus." American University's Willard Hanna called it "a new form of government
-- military-private enterprise."8 Consequently, "economic aspects of defense" became a wide-ranging
subject at SESKOAD. But Ford's Indonesian economists made it broader yet by undertaking to prepare economic policy
for the post-Sukarno period there, too.
During this period, the Communists were betwixt and between. Deprived of their victory at the polls and unwilling
to break with Sukarno, they tried to make the best of his "guided democracy," participating with the
Army in coalition cabinets. Pauker has described the PKI strategy as "attempting to keep the parliamentary
road open," while seeking to come to power by "acclamation." That meant building up PKI prestige
as "the only solid, purposeful, disciplined, well-organized, capable political force in the country,"
to which Indonesians would turn "when all other possible solutions have failed."9
At least in numbers, the PKI policy was a success. The major labor federation was Communist, as was the largest
farmers' organization and the leading women's and youth groups. By 1963, three million Indonesians, most of them
in heavily populated Java, were members of the PKI, and an estimated seventeen million were members of its associated
organizations -- making it the world's largest Communist Party outside Russia and China. At Independence the party
had numbered only eight thousand.
In December 1963, PKI Chairman D.N. Aidit gave official sanction to "unilateral action" which had been
undertaken by the peasants to put into effect a land-reform and crop-sharing law already on the books. Though landlords'
holdings were not large, less than half the Indonesian farmers owned the land they worked, and of these most had
less than an acre. As the peasants' "unilateral action" gathered momentum, Sukarno, seeing his coalition
endangered, tried to check its force by establishing "land-reform courts" which included peasant representatives.
But in the countryside, police continued to clash with peasants and made mass arrests. In some areas, santri youth
groups began murderous attacks on peasants. Since the Army held state power in most areas, the peasants' "unilateral
action" was directed against its authority. Pauker calls it "class struggle in the countryside"
and suggests that the PKI had put itself "on a collision course with the Army."10 But unlike Mao's Communists
in pre-revolutionary China, the PKI had no Red Army. Having chosen the parliamentary road, the PKI was stuck with
it. In early 1965, PKI leaders demanded that the Sukarno government (in which they were cabinet ministers) create
a people's militia -- five million armed workers, ten million armed peasants. But Sukarno's power was hollow. The
Army had become a state within a state. It was they -- and not Sukarno or the PKI -- who held the guns.11
The proof came in September 1965. On the night of the 30th, troops under the command of dissident lower-level Army
officers, in alliance with officers of the small Indonesian Air Force, assassinated General Yani and five members
of his SESKOAD "brain trust." Led by Lieutenant Colonel Untung, the rebels seized the Djakarta radio
station and next morning broadcast a statement that their September 30th Movement was directed against the "Council
of Generals," which they announced was CIA-sponsored and had itself planned a coup d'état for Armed
Forces Day, four days later.
Untung's preventive coup quickly collapsed. Sukarno, hoping to restore the pre-coup balance of forces, gave it
no support. The PKI prepared no street demonstrations, no strikes, no coordinated uprisings in the countryside.
The dissidents themselves missed assassinating General Nasution and apparently left General Suharto off their list.
Suharto rallied the elite paracommandos and units of West Java's Siliwangi division against Untung's colonels.
Untung's troops, unsure of themselves, their mission, and their loyalties, made no stand. It was all over in a
The Army high command quickly blamed the Communists for the coup, a line the Western press has followed ever
since. Yet the utter lack of activity in the streets and the countryside makes PKI involvement unlikely, and many
Indonesia specialists believe, with Dutch scholar W.F. Wertheim, that "the Untung coup was what its leader
... claimed it to be -- an internal army affair reflecting serious tensions between officers of the Central Java
Diponegoro Division, and the Supreme Command of the Army in Djakarta...."12
Leftists, on the other hand, later assumed that the CIA had had a heavy hand in the affair. Embassy officials had
long wined and dined the student apparatchiks who rose to lead the demonstrations that brought Sukarno down. The
CIA was close with the Army, especially with Intelligence Chief Achmed Sukendro, who retained his agents after
1958 with U.S. help and then studied at the University of Pittsburgh in the early sixties. But Sukendro and most
other members of the Indonesian high command were equally close to the embassy's military attachés, who
seem to have made Washington's chief contacts with the Army both before and after the attempted coup. All in all,
considering the make-up and history of the generals and their "modernist" allies and advisors, it is
clear that at this point neither the CIA nor the Pentagon needed to play any more than a subordinate role.
The Indonesian professors may have helped lay out the Army's "contingency" plans, but no one was going
to ask them to take to the streets and make the "revolution." That they could leave to their students.
Lacking a mass organization, the Army depended on the students to give authenticity and "popular" leadership
in the events that followed. It was the students who demanded -- and finally got -- Sukarno's head; and it was
the students -- as propagandists -- who carried the cry of jihad (religious war) to the villages.
In late October, Brigadier General Sjarif Thajeb -- the Harvard-trained minister of higher education (and now ambassador
to the United States) -- brought student leaders together in his living room to create the Indonesian Student Action
Command (KAMI).13 Many of the KAMI leaders were the older student apparatchiks who had been courted by the U.S.
embassy. Some had traveled to the United States as American Field Service exchange students, or on year-long jaunts
in a "Foreign Student Leadership Project" sponsored by the U.S National Student Association in its CIA-fed
Only months before the coup, U.S. Ambassador Marshall Green had arrived in Djakarta, bringing with him the reputation
of having masterminded the student overthrow of Syngman Rhee in Korea and sparking rumors that his purpose in Djakarta
was to do the same there. Old manuals on student organizing in both Korean and English were supplied by the embassy
to KAMI's top leadership soon after the coup.
But KAMI's most militant leadership came from Bandung, where the University of Kentucky had mounted a ten-year
"institution-building" program at the Bandung Institute of Technology, sending nearly five hundred of
their students to the United States for training. Students in all of Indonesia's elite universities had been given
paramilitary training by the Army in a program for a time advised by an ROTC colonel on leave from Berkeley. Their
training was "in anticipation of a Communist attempt to seize the government," writes Harsja Bachtiar,
an Indonesian sociologist and an alumnus of Cornell and Harvard.14
In Bandung, headquarters of the aristocratic Siliwangi division, student paramilitary training was beefed up
in the months preceding the coup, and santri student leaders were boasting to their American friends that they
were developing organizational contacts with extremist Moslem youth groups in the villages. It was these groups
that spearheaded the massacres of PKI followers and peasants.
At the funeral of General Nasution's daughter, mistakenly slain in the Untung coup, Navy chief Eddy Martadinata
told santri student leaders to "sweep." The message was "that they could go out and clean up the
Communists without any hindrance from the military, wrote Christian Science Monitor Asian correspondent John Hughes.
With relish they called out their followers, stuck their knives and pistols in their waistbands, swung their clubs
over their shoulders, and embarked on the assignment for which they had long been hoping."15 Their first move
was to burn PKI headquarters. Then, thousands of PKI and Sukarno supporters were arrested and imprisoned in Djakarta;
cabinet members and parliamentarians were permanently "suspended"; and a purge of the ministries was
The following month, on October 17, 1965, Colonel Sarwo Edhy took his elite paratroops (the "Red Berets")
into the PKI's Central Java stronghold in the Bojolali-Klaten-Solo triangle. His assignment, according to Hughes,
was "the extermination, by whatever means might be necessary, of the core of the Communist Party there."
He found he had too few troops. "We decided to encourage the anti-communist civilians to help with the job,"
the Colonel told Hughes. "In Solo we gathered together the youth, the nationalist groups, the religious Moslem
organizations. We gave them two or three days' training, then sent them out to kill Communists."16
The Bandung engineering students, who had learned from the Kentucky AID team how to build and operate radio transmitters,
were tapped by Colonel Edhy's elite corps to set up a multitude of small broadcasting units throughout strongly
PKI East and Central Java, some of which exhorted local fanatics to rise up against the Communists in jihad. The
U.S. embassy provided necessary spare parts for these radios.
Time magazine describes what followed:
Communists, Red sympathizers and their families are being massacred by the thousands. Backlands army units are
reported to have executed thousands of Communists after interrogation in remote jails.... Armed with wide-blade
knives called parangs, Moslem bands crept at night into the homes of Communists, killing entire families and burying
the bodies in shallow graves.... The murder campaign became so brazen in parts of rural East Java that Moslem bands
placed the heads of victims on poles and paraded them through villages. The killings have been on such a scale
that the disposal of the corpses has created a serious sanitation problem in East Java and Northern Sumatra, where
the humid air bears the reek of decaying flesh. Travelers from these areas tell of small rivers and streams that
have been literally clogged with bodies; river transportation has at places been seriously impeded.17
Graduate students from Bandung and Djakarta, dragooned by the Army, researched the number dead. Their report, never
made public, but leaked to correspondent Frank Palmos, estimated one million victims. In the PKI "triangle
stronghold" of Bojolali, Klaten, and Solo, Palmos said they reported, "nearly one-third of the population
is dead or missing."18 Most observers think their estimate high, putting the death toll at three to five hundred
The KAMI students also played a part -- bringing life in Djakarta to a standstill with anti-communist, anti-Sukarno
demonstrations whenever necessary. By January, Colonel Edhy was back in Djakarta addressing KAMI rallies, his elite
corps providing KAMI with trucks, loudspeakers, and protection. KAMI demonstrators could tie up the city at will.
"The ideas that Communism was public enemy number one, that Communist China was no longer a close friend but
a menace to the security of the state, and that there was corruption and inefficiency in the upper levels of the
national government were introduced on the streets of Djakarta," writes Bachtiar.19
The old PSI and Masjumi leaders nurtured by Ford and its professors were home at last. They gave the students advice
and money, while the PSI-oriented professors maintained "close advisory relationships" with the students,
later forming their own Indonesian Scholars Action Command (KASI). One of the economists, Emil Salim, who had recently
returned with a Ph.D. from Berkeley, was counted among the KAMI leadership. Salim's father had purged the Communist
wing of the major prewar nationalist organization, and then served in the pre-Independence Masjumi cabinets.
In January the economists made headlines in Djakarta with a week-long economic and financial seminar at the Faculty.
It was "principally ... a demonstration of solidarity among the members of KAMI, the anti-Communist intellectuals,
and the leadership of the Army," Bachtiar says. The seminar heard papers from General Nasution, Adam Malik,
and others who "presented themselves as a counter-elite challenging the competence and legitimacy of the elite
led by President Sukarno."20
It was Djakarta's post-coup introduction to Ford's economic policies.
In March Suharto stripped Sukarno of formal power and had himself named acting president, tapping old political
warhorse Adam Malik and the Sultan of Jogjakarta to join him in a ruling triumvirate. The generals whom the economists
had known best at SESKOAD -- Yani and his brain trust -- had all been killed. But with the help of Kahin's protégé,
Selosoemardjan, they first caught the Sultan's and then Suharto's ear, persuading them that the Americans would
demand a strong attack on inflation and a swift return to a "market economy." On April 12, the Sultan
issued a major policy statement outlining the economic program of the new regime -- in effect announcing Indonesia's
return to the imperialist fold. It was written by Widjojo and Sadli.
In working out the subsequent details of the Sultan's program, the economists got aid from the expected source
-- the United States. When Widjojo got stuck in drawing up a stabilization plan, AID brought in Harvard economist
Dave Cole, fresh from writing South Korea's banking regulations, to provide him with a draft. Sadli, too, required
some post-doctoral tutoring. According to an American official, Sadli "really didn't know how to write an
investment law. He had to have a lot of help from the embassy." It was a team effort. "We were all working
together at the time -- the 'economists,' the American economists, AID," recalls Calvin Cowles, the first
AID man on the scene.
By early September the economists had their plans drafted and the generals convinced of their usefulness. After
a series of crash seminars at SESKOAD, Suharto named the Faculty's five top men his Team of Experts for Economic
and Financial Affairs, an idea for which Ford man Frank Miller claims credit.
In August the Stanford Research Institute -- a spinoff 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
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
... treasurehouse 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."
"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,"22 observed a well-placed insider in
1966. Sumitro slipped quietly into Djakarta, opened a business consultancy, and prepared himself for high office.
In June 1968 Suharto organized an impromptu reunion for the class of Ford -- a "development cabinet."
As minister of trade and commerce he appointed Dean Sumitro (Ph.D., Rotterdam); as chairman of the National Planning
Board he appointed Widjojo (Ph.D., Berkeley, 1961); as vice-chairman, Emil Salim (Ph.D., Berkeley, 1964); as secretary
general of Marketing and Trade Research, Subroto (Harvard, 1964); as minister of finance, Ali Wardhana (Ph.D.,
Berkeley, 1962); as chairman of the Technical Team of Foreign Investment, Mohamed Sadli (M.S., MIT, 1956); as secretary
general of Industry, Barli Halim (M.B.A., Berkeley, 1959). 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."23
Since 1954, Harvard's Development Advisory Service (DAS), the Ford-funded elite corps of international modernizers,
has brought Ford influence to the national planning agencies of Pakistan, Greece, Argentina, Liberia, Colombia,
Malaysia, and Ghana. In 1963, when the Indonesian economists were apprehensive that Sukarno might try to remove
them from their Faculty, Ford asked Harvard to step into the breach. Ford funds would breathe new life into an
old research institute, in which Harvard's presence would provide a protective academic aura for Sumitro's scholars.
The DAS was skeptical at first, says director Gus Papanek. But the prospect of future rewards was great. Harvard
would get acquainted with the economists, and in the event of Sukarno's fall, the DAS would have established "an
excellent base" from which to plan Indonesia's future.
"We could not have drawn up a more ideal scenario than what happened," Papanek says. "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."
Officially the Harvard DAS-Indonesia project resumed on July 1, 1968, but Papanek had people in the field well
before that joining with AID's Cal Cowles in bringing back the old Indonesia hands of the fifties and sixties.
After helping draft the stabilization program for AID, Dave Cole returned to work with Widjojo on the Ford/Harvard
payroll. Leon Mears, an agricultural economist who had learned Indonesian rice-marketing in the Berkeley project,
came for AID and stayed on for Harvard. Sumitro's old friend from MIT, Bill Hollinger, transferred from the DAS-Liberia
project and now shares Sumitro's office in the Ministry of Trade.
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 had got them bounced from Pakistan. In Indonesia; "we stay in the background."
Harvard stayed in the background while developing 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
The plan went into force without fanfare in January 1969, its key elements foreign investment and agricultural
self-sufficiency. It is a late-twentieth-century American "development" plan that sounds suspiciously
like the mid-nineteenth-century Dutch colonial strategy. Then, Indonesian labor -- often corvée -- 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" changes in Indonesian class relationships.
Probably it will do neither -- though AID is currently supporting a project at Berkeley's Center for South and
Southeast Asian Studies to give it the old college try. Negotiated with Harsja Bachtiar, the Harvard-trained sociologist
now heading the Faculty's Ford-funded research institute, the project is to train Indonesian sociologists to "modernize"
relations between the peasantry and the Army's state power.
The agricultural plan is being implemented by the central government's agricultural extension service, whose
top men were trained by an AID-funded 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
with 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. If they raise a ruckus they are "sabotaging a national program,"
must be PKI agents, and the soldiers are called in.
The Indonesian ruling class, observes Wertheim, is now "openly waging [its] own brand of class struggle."24
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," DAS Director
Papanek reported in October 1968. "A really widespread public works program, financed by increased imports
of PL 480 commodities sold at lower prices, could provide quick economic and political benefits in the countryside."25
Harvard's Indonesian New Deal is 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 or provide
bribes by which they will secure their civilian retainees. 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 three-hundred-thousand-man Army itself. The other is composed of the one hundred twenty thousand political
prisoners still being held after the Army's 1965-66 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, whom the government's
daily food expenditure is slightly more than a penny. At least two journalists have reported Sumatran prisoners
quartered in the middle of the Goodyear rubber plantation where they had worked before the massacres as members
of a PKI union. Now, the correspondents say, they are let out daily to work its trees for substandard wages, which
are paid to their guards.26
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.27
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 it is the foreign-investment plan that is the payoff of Ford's twenty-year strategy in Indonesia and the
pot of gold that the Ford modernizers -- both American and Indonesian -- are paid to protect. The nineteenth-century
Colonial Dutch strategy built an agricultural export economy. The Americans are interested primarily in resources,
Freeport Sulphur will mine copper on West Irian. International Nickel has got the Celebes' nickel. Alcoa is negotiating
for most of Indonesia's bauxite. Weyerhaeuser, International Paper, Boise Cascade, and Japanese, Korean, and Filipino
lumber companies will cut down the huge tropical forests of Sumatra, West Irian, and Kalimantan (Borneo). A U.S.-European
consortium of mining giants, headed by U.S. Steel, will mine West Irian's nickel. Two others, U.S.-British and
U.S.-Australian, will mine tin. A fourth, U.S.-New Zealander, is contemplating Indonesian coaling. The Japanese
will take home the archipelago's shrimp and tuna and dive for her pearls.
Another unmined resource is Indonesia's one hundred twenty million inhabitants -- half 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 an hour.
But the real prize is oil. During one week in 1969, twenty three companies, nineteen 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. As a result, Ford is sponsoring a new Berkeley project at the University
of California law school in "developing human resources for the handling of negotiations with foreign investors
Looking back, the thirty-year-old vision for the Pacific seems secure in Indonesia -- thanks to the flexibility
and perseverance of Ford. A ten-nation "Inter-Governmental Group for Indonesia," including Japan, manages
Indonesia's debts and coordinates Indonesia's aid. A corps of "qualified" native technocrats formally
make economic decisions, kept in hand by the best American advisors the Ford Foundation's millions can buy. And,
as we have seen, American corporations dominate the expanding exploitation of Indonesia's oil, ore, and timber.
But history has a way of knocking down even the best-built plans. Even in Indonesia, the "chaos" which
Ford and its modernizers are forever preventing seems just below the surface. Late in 1969, troops from West Java's
crack Siliwangi division rounded up five thousand surprised and sullen villagers in an odd military exercise that
speaks more of Suharto's fears than of Indonesia's political "stability." Billed as a test in "area
management," officers told reporters that it was an exercise in preventing a "potential fifth column"
in the once heavily-PKI area from linking up with an imaginary invader. 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."28
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, landlords and officers fear going out after
dark. Those who do so are sometimes found with their throats cut, and the generals mutter about "night PKI."
1. Richard M. Nixon, "Asia After Vietnam," Foreign Affairs, October 1967, p. 111.
2. Soedjatmoko, "Indonesia on the Threshold of Freedom," address to Cooper Union, New York, 13 March
1949, p. 9.
3. Sumitro Djojohadikusumo, untitled address to School of Advanced International Studies, Washington, D.C., 1949,
4. Dean Rusk, "Foreign Policy Problems in the Pacific," Department of State Bulletin, 19 November 1951,
p. 824 ff.
5. Guy J. Pauker, "The Rise and Fall of the Communist Party of Indonesia," Rand Corporation Memorandum
RM-5753-PR, February 1969, p. 46.
6. Michael Max Ehrmann, The Indonesian Military in the Politics of Guided Democracy, 1957-1965, unpublished Masters
thesis (Cornell University, Ithaca, New York, September 1967), p. 296, citing Col. George Benson (U.S. Army), U.S.
military attaché in Indonesia 1956-1960.
7. Daniel S. Lev, The Transition to Guided Democracy: Indonesian Politics, 1957-1959 Ithaca NY: Modern Indonesia
Project, Cornell University, 1966), p. 70.
8. Robert Shaplen, "Indonesia II: The Rise and Fall of Guided Democracy," New Yorker, 24 May 1969, p.
48; Willard Hanna, Bung Karno's Indonesia (New York: American Universities Field Staff, 25 September 1959), quoted
in J.A.C. Mackie, "Indonesia's Government Estates and Their Masters," Pacific Affairs, Fall 1961, p.
9. Guy J. Pauker, "The Rise and Fall of the Communist Party of Indonesia," pp. 6, 10.
10. Ibid., p. 43.
11. W.F. Wertheim, "Indonesia Before and After the Untung Coup," Pacific Affairs, Spring/Summer 1966,
12. Ibid., p. 115.
13. Harsja W. Bachtiar, "Indonesia," in Donald K. Emmerson, ed., Students and Politics in Developing
Nations (New York: Praeger, 1968), p. 192.
14. Ibid., p. 55.
15. John Hughes, Indonesian Upheaval (New York: McKay, 1967), p. 132.
16. Ibid., p. 151.
17. "Silent Settlement," Time, 17 December 1965, p. 29 ff.
18. Frank Palmos, untitled news report dated "early August 1966" (unpublished). Marginal note states
that portions of the report were published in the Melbourne Herald at an unspecified date.
19. Harsja W. Bachtiar, op. cit., p. 193.
20. Ibid., p. 195.
21. H.E. Robison, "An International Report," speech delivered at Stanford Research Institute, 14 December
22. J. Panglaykim and K.D. Thomas, "The New Order and the Economy," Indonesia, April 1967, p. 73.
23. "Indonesia's Potholed Road Back," Fortune, 1 June 1968, p. 130.
24. W.F. Wertheim, "From Aliran Towards Class Struggle in the Countryside of Java," paper prepared for
the International Conference on Asian History, Kuala Lumpur, August 1968, p. 18. Published under the same title
in Pacific Research 10, no. 2.
25. Gustav F. Papanek, "Indonesia," Harvard Development Advisory Service memorandum (unpublished), 22
26. Jean Contenay, "Political Prisoners," Far Eastern Economic Review, 2 November 1967, p. 225; NBC documentary,
19 February 1967.
27. Herbert Feith, "Blot on the New Order," New Republic, 13 April 1968, p. 19.
28. "Indonesia -- Army of Occupation," The Bulletin, 22 November 1969.