Foreign Relations of the United States, 1969–1976, Volume E–12, Documents on East and Southeast Asia, 1973–1976

123. National Intelligence Estimate 55–1–75, Washington, June 30, 1975.¹ ²

Washington, June 30, 1975

PROSPECTS FOR INDONESIA
SCOPE NOTE

This estimate covers the next five years.

KEY JUDGMENTS

Indonesia has good prospects for economic growth over the next five years. Oil revenues, private foreign investment, and foreign aid will permit continued development and diversification of domestic production capacity, although weaknesses in the indigenous institutional framework could slow the process.

Some of the benefits of progress—a stabilized currency, higher levels of production, rising incomes, greater availabilities of consumer goods, improved communications, and new employment opportunities—are filtering down to the general population, although the extent is far from clear. But socio-economic problems, of which population pressure is the most intractable, remain very serious indeed. Moreover, development itself has been heightening social tensions—undermining tradition-sanctioned economic relationships and procedures, destabilizing rural society, stimulating people to move to the cities in numbers that strain social services and exceed employment opportunities, heightening aspirations beyond the possibilities of fulfilling them, and underlining the greatly increased disparities between the conspicuous and corruption-fed consumption of the few and the continued poverty of the many.

Over the period of this estimate, festering social problems will provide rallying cries for the politically disaffected. These now include virtually all of the politically significant civilian elements—party politicians, students, intellectuals, and most important of all, the Muslims—all of whom expected to play a more important role in post-Sukarno Indonesia. Instead, increasingly their activities have been restricted by even more pervasive and effective controls than existed before the military assumed power. However, opposition or potential opposition groups are weak, divided, without widely attractive leaders, and incapable of effective challenge to a united military.

At present, there are no serious challenges to military unity. If this remains the case, the Suharto government will be able to maintain itself in control. There are fissures, however, within the military that could become more important with time. Dissatisfaction with Suharto’s leadership could result in his displacement. But if this represented a general consensus, it would not necessarily be destabilizing and would probably result in little more than a change in the cast of characters at the top. Greater changes could result from the breakdown of consensus among more or less evenly balanced factions, seeking to exploit civilian grievances in the struggle for power. A change of government precipitated by serious social upheaval could bring to the fore a puritanical, ultranationalist military reform movement that might well be hostile to continued foreign investment and to a free enterprise economy.

Economic hardship, especially in Java, social dislocations in urban and rural areas, and political frustrations could combine to produce a massive and uncontrollable breakdown of public order. During the period of this estimate violence on this scale is unlikely. There is a good chance, however, that a combination of events and forces will precipitate limited but still serious political disorders. Even under these circumstances if the military remains united, they will be able to maintain control.

Indonesia will probably continue to lean toward the United States and the West. It will focus its foreign and security policy on the Southeast Asian region where, its leaders believe, Indonesia is destined to play the principal role. The other ASEAN states, however, do not automatically accept Indonesian leadership. There are lingering suspicions that Jakarta’s regional model is merely a subtler form of Sukarno’s grand design for Indonesian regional hegemony. And, as its neighbors recognize, Jakarta for some time to come will be unable to provide practical underpinnings for its regional proposals or assume significant responsibilities in the area.

1. Source: Central Intelligence Agency, OPI 122 (National Intelligence Council), Job 79R01012A, Box 498, NIE 55–1–75, Folder 5. Secret. All members of the U.S. Intelligence Board concurred in the estimate except the representatives of the FBI and the Deputy Assistant Administrator for National Security, Energy Research and Development Administration. The intelligence sections of the Army, Navy, and Air Force also participation in the estimate.
2. The estimate examined the prospects for Indonesia over the next five years.