Indonesia

Addressing members of Indonesia's Air Force Special Troops (Paskhas) on March 25, President Abdurrahman Wahid called for Indonesia to break its military dependence on the United States. The president's comments are less about market dominance than strategic dominance. Since his election, Wahid has paid the United States little diplomatic heed, instead focusing on Asian neighbors and calling for greater cooperation with China and India.

In reality, U.S. arms sales and military cooperation with Indonesia have declined sharply over the last few years. Now, Wahid is suggesting that the military buy from countries like France or Russia. Wahid said he did not fear a backlash from the U.S. for his decision to diversify weapons sources. "They also need us," he said. "Without us, security in this region is not guaranteed." The Indonesian president is likely correct that Washington considers his country important to regional stability, but he may be miscalculating the potential American response. With Wahid contemplating greater cooperation with Russia and China, the United States is unlikely to take a passive stance.

Wahid's presidency is re-shaping Indonesia's relationship with China, both by easing the government's strict anti-communist stance and by growing more friendly with the country's ethnic Chinese elite. Wahid has steadily promoted a shift in Indonesia's anti- Communist policies, which were established following a 1965 coup attempt attributed to pro-Communist forces potentially supported by China. Over the past week, the president has advocated the reversal of a law that forbade the teaching of communist ideology in Indonesia and that blocked the activities of the Indonesian Communist Party. His calls triggered a domestic backlash, similar to that when he earlier attempted to open relations with Israel.

Though he has justified these moves as helping Indonesian democracy, they appear to be part of a series of overtures toward Beijing. In early March, Wahid eliminated a law allowing special investigations into all political candidates, which had previously been used to look for communist connections. He has also expanded on efforts by former President B.J. Habibie to reverse anti-ethnic Chinese laws, established in conjunction with the country's anti- communist regulations.

Both presidents have been motivated by economics. Indonesia's ethnic Chinese minority controls a substantial portion of the nation's capital. This, however, has often made them the target of domestic unrest, inducing many to flee the nation - with their money. In addition to reversing capital flight, Wahid has deeper reasons for promoting greater acceptance of China. During his speech to the Paskhas, Wahid said the United States does "not simply want to help us, they want to sell to us." Wahid said Indonesia had been "made dependent on the United States," both economically and militarily, adding, "I have thought for a long time about reducing our acquiescence to the U.S. and depending more on our own capability."

Wahid's statements appear to stem more from strategic and political considerations than from a real concern over the United States cornering the Indonesian arms market. The United States has traditionally been Jakarta's primary weapons supplier, with over $1 billion in arms sales since 1975. But the flow of weapon systems has waned considerably in the last few years. Human rights lobbies have played a key role in reducing arms sales. In 1993 the State Department banned small arms sales; in 1995 and 1996 the ban was expanded to include helicopter-mounted armaments and armored personnel carriers. In September 1999, following accusations of military human rights abuses in East Timor, the United States suspended all new and pending commercial and foreign military sales to Indonesia.

While Indonesia still relies on the United States for spare parts and system upgrades, Jakarta has already been weaned from Washington's military assistance. The 1997 Asian economic crisis further reduced Indonesia's arms expenditures, and the European Union - whose sales have often collectively surpassed that of the U.S. - dropped its own arms embargo in January 2000.

Both Europe and Russia have entered the picture. But the government appears to be looking to China for both military support and strategic positioning. Wahid has promoted greater cooperation with China since before he was elected President, vowing to make Beijing one of his first official visits. Wahid's visit in December 1999 was followed by bilateral economic and political consultations. Jakarta's newfound openness to China after years of estrangement, coupled with calls for decreased dependence on the United States, presents a troubling situation for Washington.

The Indonesian president expressed little concern for a U.S. backlash, noting that Indonesia remains strategically vital to the region. However, it is this same vital position that will induce Washington to react rather than sit back and observe. Indonesia would not be alone in finding important, new strategic partners. Malaysia, a growing ally for Indonesia, is a long-time vocal opponent of U.S. regional hegemony. Malaysia is a major purchaser of Russian arms and is increasing its contacts with China. At a recent defense meeting, the idea of joint Malaysian-Chinese military exercises was even broached. Adding to this, Malaysia, Indonesia and Brunei have proposed greater trilateral cooperation.

Wahid intends to use his apparent lack of concern as a bargaining tool in his upcoming April visit to Washington. However, he may be overly optimistic about his leverage. Former Indonesian President Sukarno's flirtation with communism and Beijing - in addition to Phnom Penh, Pyongyang and Hanoi - spawned the 1965 coup attempt. In the wake of the failed takeover of the government, a wave of anti-Communist and anti-Chinese sentiments fueled the executions and arrests of millions and led to decades of institutionalized discrimination against ethnic Chinese.

While Washington is unlikely to advocate a similar course of events at this time, it will not sit back and watch as the regional balance of power slips into the hands of Chinese and Russian governments. U.S. military ties can be resumed. Other measures could include inducing allies in Europe and Asia to increase diplomatic and military ties with Indonesia as proxies. Washington may also take a more extreme measure and implement sanctions against Jakarta, though U.S. imports represent less than 15 percent of Indonesia's exports. Another possibility may be calling Wahid at his own game; the country's Muslim majority could easily find the new policies distasteful.

Indonesian Air Force Chief of Staff Air Marshall Hanafie Asnan claimed August 9 that intensive foreign reconnaissance flights over Indonesian trouble spots, including Aceh, Ambon, and East Timor, have recently been increasing. According to an article in the August 10 issue of the Indonesian newspaper Suara Karya, Asnan told a conference in Jakarta that Indonesian Hawk 100 and 200 training jets had been unable to positively identify the illegal intruders due to the foreign aircraft's superior speed and avionics. According to Suara Karya, Asnan "did not deny" suggestions that the aircraft may have been carrier-based jets.

Failing to deny a suggestion is far from validating that suggestion, and Ambon, Aceh, and East Timor are a bit widely distributed for aircraft from one single carrier to visit. But there is evidence to suggest that carrier-based aircraft are in a position to monitor Indonesian events. The USS Kitty Hawk battle group just concluded scheduled naval exercises in the South China Sea with Malaysia, Singapore, Indonesia, and Thailand (which has recently acquired a jump jet carrier). Aircraft from the Kitty Hawk were available for reconnaissance should Washington have deemed it necessary. Additionally, the USS Constellation arrived in Singapore on August 10, reportedly to carry out training exercises with the Singapore Navy. As for the distribution of the reconnoitered areas, Asnan said nothing about the aircraft being of the same type, or of performing recon on the same day, nor did Suara Karya suggest all were carrier based.

Speaking at the conclusion of the Kitty Hawk's exercises, battle group commander Rear Admiral Timothy Keating noted that there was no indication China planned to attack Taiwan, but vowed that China would "have the U.S. Navy to deal with" if it attempted aggression against Taiwan or any other target. "We are there in numbers, we're trained, we're ready, and we're very powerful," the Associated Press quoted Keating as saying. At the same time, Keating downplayed the Constellation's presence in the area, saying the carrier was bound for the Persian Gulf and had nothing to do with the Taiwan crisis.

So what we have is this. First, the Indonesian military contends that foreign aircraft, which may or may not have been carrier based, have been increasing illicit reconnaissance overflights of Indonesia. Second, they made this claim at the same time two U.S. carrier battle groups are in the South China Sea. This may be a coincidence, but it is interesting that, despite tensions in North Korea and Taiwan not to mention Keating's rhetoric, the U.S. saw it fit to place two carrier battle groups off the coast of Indonesia however coincidentally or temporarily. Obviously, Washington does not seem to feel that Chinese military action is imminent. At the same time, it seems to indicate some degree of concern over another link in the archipelagic chain containing China - Indonesia.

Indonesia is a key component of U.S. strategy. First, if the United States is now engaged in containing China, the chain of countries stretching from South Korea to Japan, Taiwan, the Philippines, through Indonesia, Malaysia, and Singapore, to Thailand is critical. Given Indonesia's position astride vital sea lanes and between Australia and peninsular Southeast Asia, Indonesia is more critical to that chain than most. Indeed, since the U.S. has a strategic commitment to controlling the world's maritime choke points, the Straits of Malacca and Lombok can be closed from Indonesia. Therefore, what happens in Indonesia is of critical interest to the United States both in relation to China and in the broadest contexts of American strategy.

The U.S. has tried to maintain a low profile on domestic Indonesian events in an attempt not to exacerbate the situation. At the same time, the U.S. is eager to ensure that Indonesia does not disintegrate. Besides knowing that it doesn't want Indonesia to collapse, and generally supporting East Timor's independence movement, Washington really does not have a coherent policy on Indonesia at present. Or, to be more precise, it has a desired outcome without any obvious means of ensuring that outcome. This generalized concern would warrant monitoring explosive areas like Aceh, Ambon, and East Timor. Apart from gathering information, it would signal the intensely maneuvering political factions inside Indonesia of U.S. interest and concern. At the same time, using carrier based aircraft for the reconnaissance mission would appear to be a particularly overt move, unless immediate, tactical information were required. So, if the Indonesian report is true and our inference that the flights originated from U.S. carriers in the region is also true, then it would appear that U.S. concern is mounting. Why would this be the case right now?

The current political situation inside of Indonesia seems to indicate that Megawati, the populist daughter of former President Sukarno, whose party won a plurality in recent elections, has been outmaneuvered in the post-election coalition building. It is unlikely that she will win the Presidency, as Islamic parties have created a broad coalition that may actually benefit current President Habibie's drive to hold on to power. As the realization dawns on her followers, they may take to the streets, destabilizing the country. As Indonesia hovers on the knifes edge, the United States has undoubtedly been drawn into the maneuvering if only in an attempt to contain the situation. The reconnaissance flights might well have been some sort of signal of American interest to the various parties. If so, it was noted and broadcast by the current government, clearly a beneficiary of the signal.

Then there is the question of East Timor and Australia, which has become a particularly complex tangle of late. The paradoxical U.S. position is that Indonesia must survive as a united state, but East Timor, seized by Indonesia from Portugal, must be given its independence. East Timor has been an ongoing nightmare, but one that appears to be drawing to a close as free elections approach. Now America's closest partner in monitoring and managing tensions in Indonesia is Australia, for which events in Indonesia have even greater immediacy than for the United States.. They must coordinate policies.

This has proved difficult. For the U.S., Indonesia is a long-term issue of grand strategy, currently drawing mid-level attention and contingency planning. For Australia, Indonesia - and specifically East Timor - has been a matter of immediate and high level concern for several months. Australia has taken a leading role in managing the run-up to the East Timor ballot on independence, and will likely provide the nucleus of any UN peacekeeping force in the territory. Australia will also bear the brunt of any chaos in East Timor, and so is carefully and patiently working to manipulate a peaceful transition to whatever status East Timor adopts.

The asymmetry of interest has apparently led to a misunderstanding between the two countries over U.S. intentions. The Melbourne Age reported on August 1 that Canberra had ordered Australian officials visiting U.S. Pacific military headquarters in Hawaii to reject a U.S. offer of a U.S. Marine "peacemaking" force, to be deployed in East Timor either before or after the independence referendum. It then reported on August 10 that the U.S. contingency plans included up to 15,000 Marines. First, Australian Foreign Minister Alexander Downer rejected the story as nonsense. When the Age publicized a telegram from Australia's representatives at the contingency planning session, detailing the U.S. offer, Downer was forced to admit that the U.S. had discussed the plan with Australia - "hypothetically." The Pentagon issued a statement on August 11 denying it had made any such offer. What seems to have happened is that the U.S. military, as is its normal policy, did some contingency planning on East Timor, ranging from a few unarmed observers to 15,000 Marines. For the U.S., it was a hypothetical exercise. The Australian representatives, took the contingency plan as an offer.

The alternative explanation is that the United States does have a contingency plan for Indonesia including about a division of Marines. It is doubtful that East Timor would justify such a commitment of forces. Indonesia as a whole might. It is possible that the Australian representative, focused on East Timor, confused a willingness to commit 15,000 Marines to Indonesia as a desire to commit them to East Timor. All of this is murky.

However, this much seems to be emerging from the gloom. While the headlines are focused on China-Taiwan, the United States seems to be increasingly focused on Indonesia. There is clearly a contingency plan for deploying U.S. troops and this has clearly been discussed with Australia in sufficiently ambiguous terms as to come across as a desire to deploy troops rather than as the ability to do so. It is also clear that, at least temporarily, two U.S. carriers are in the region and that the Indonesians seem to think that they are flying reconnaissance missions over their territory. China may wind up seizing some small islands near its coast, like Quemoy. But the U.S. seems to be more worried, for the moment, about Indonesia.

The situation in East Timor has reached critical mass. Most international observers have fled the province. UN staff in East Timor report that phone communication out of Dili has been cut. The Indonesian military has moved in to restore order under recently declared martial law. There are approximately 15,000 army troops in East Timor, along with 8,000 police. However, this is the same military that has been accused of fomenting and facilitating much of the current violence.

This raises questions. First, will the military be willing and able to stop the violence? Second, who has control of the situation? While the answers are not entirely clear, they nonetheless may determine the future of Indonesia as a nation.

At a time when the recent elections have made the future Indonesian leadership unclear, Indonesia's social and political cohesiveness is increasingly dependent on the one overarching organization that can maintain unity - the military. The military and the ruling Golkar party were the bastions of stability in Indonesia throughout former President Suharto's regime. Golkar represented the bureaucracy, permeating all layers of Indonesian society. Anyone involved in the day-to-day social aspects of keeping Indonesia running - from postal workers to school teachers - was part of Golkar. Following the downfall of Suharto and the lead-up to the June 7 general elections, Golkar steadily lost power and influence, downgrading its status to little more than another political party.

This leaves the military to act as Indonesia's sole unifying force even as splits within the military threaten to add to the current chaos. The question now is who controls what. With the army split into several factions, some facilitating and some working to end the violence, there are several hands possibly controlling the situation: Suharto and those loyal to him, Defense Minister and armed forces chief Gen. Wiranto, and President B.J. Habibie. The alternative, and potentially most serious, is that no one is in control.

It is possible that elements loyal to Suharto are responsible for arming the pro-integration militias and continuing the violence. By some accounts, the Suharto family owns more than 40 percent of East Timor. This would likely be lost if East Timor gains independence. Much of the military-backed violence in the province has been blamed on the Kopassus, Indonesia's special forces, which until 1998 were led by Suharto's son-in-law, Lt. Gen. Prabowo Subianto. Prabowo's recent retirement did not end the close link between the Suharto family and the Kopassus. The high degree of cooperation between Kopassus forces and the Suharto family, as well as the 2,000 Kopassus troops in East Timor, raise questions of whether Habibie and Wiranto are involved.

If they are not, the presence of these elite forces raise doubts as to whether these two leaders can bring the military back into line. Wiranto plays a key role in the events in East Timor, and in overall military stability. Wiranto, who served under Suharto, has worked to maintain the military's strength under new political rules. He has positioned himself to remain in control of the military regardless of who becomes the next president. He has overseen the split of the Armed Forces of Indonesia (ABRI) into the Indonesian Defense Force (TNI) and the Police (Polri). He also set the military apart as a politically independent organization, while establishing personal links to all major parties. While Wiranto maintains control over much of his institution, it is not clear if he can end the violence in East Timor - or if he wants to.

Having pledged to return stability to East Timor without UN assistance, Wiranto has laid his position on the line. If he is unable to control the pro-integration militia or the military, he will lose his legitimacy as head of the armed forces. However, it is possible that Wiranto does not want to see peace restored in East Timor. He may want to demonstrate the consequences of leaving the republic to other separatist movements in Indonesia. Wiranto may also be concerned about the precedent that would be set by withdrawing armed forces from East Timor [ http://www.stratfor.com/services/giu/090799.ASP ].

Alternately, Wiranto may have even instigated the outbreak of violence, in which case he would be just as capable of stopping it. The ability of the military to both foment and halt a crisis would be a clear signal to Jakarta of who is really in charge. While a sudden calm in East Timor would signal that Wiranto has been in control, it could also be the result of Wiranto making deals to heal the fractured armed forces. Either way, the military emerges as unified victor.

President B.J. Habibie's hand in the situation is also unclear. The situation in East Timor has diverted attention away from economic scandals and the slow formation of Indonesia's new parliament. Habibie initiated the referendum, offering the province independence rather than simply greater autonomy. The offer came as a shock and was greeted with skeptical apprehension by both independence and integration advocates. The president may have made the offer to force the independence movement to consider the economic and security implications of their effort, hoping that the East Timorese would choose autonomy over the chaos of independence. But events have spun out of his control.

Conversely, Habibie may have been tempted to use East Timor to help control the selection of the next president. If East Timor requires the full attention of the government and military, and the military is unable to seal the splits in its ranks, Habibie can argue that changing regimes is too risky right now. At the same time, Habibie has gained international status by demonstrating that he would even allow a vote on independence.

While it is unclear that Suharto, Wiranto or Habibie are in control of East Timor, an even more ominous prospect is that no one is in control. The splits in the military have led to at least four potential factions: the majority who remain loyal to Wiranto; Suharto loyalists, including the elite Kopassus; the Indonesian police; and the military officers loyal to opposition leader Megawati Sukarnoputri, daughter of former President Sukarno. Each of these factions, as well as potential local independent commanders operating under their own initiatives, may be attempting simultaneously to control the situation in East Timor. If Wiranto does not heal these splits, the potential for Indonesia is tremendous. With 6000 inhabited islands stretching across three time zones, and dozens of ethnic and religious groups, stability in Indonesia's military is vital.

The events in East Timor over the next week will offer more insight into just who controls the military. If at least the appearance of stability cannot be regained in a few days, international intervention is likely. But if no one controls the Indonesian military, whom would international forces face? The future of the republic may well rest on the resolution of the crisis in East Timor.

On Dec. 7, Indonesian Defense Minister Juwono Sudarsono joined the raging debate in the government concerning the merits of transforming Indonesia into a federalist system as the solution to its widespread separatist problems. He echoed the position of many Indonesians by saying that federalism is the "first step toward uncontrollable separatism."

The debate over transforming unitary Indonesia into a group of federated states - an idea championed by President Abdurrahman Wahid himself - has struck at the heart of nationalist sentiment in Indonesia. It has created deep rifts in the president's Cabinet of National Unity [ http://www.stratfor.com/asia/countries/indonesia/Elections/indonesianewcabinet.htm ], which now prevent it from being the "government of national reconciliation" that Wahid had intended. More dangerously, it has allied two powerful nationalist forces that stand firmly opposed to federalism: Vice President Megawati Sukarnoputri, whose party has the largest presence in the legislature, and the Indonesian armed forces, which still wields substantial control over the country. As a result, Wahid may soon be forced to abandon his own agenda for national reconciliation.

Wahid first initiated the controversy when he suggested federalism - a collection of relatively autonomous states organized around a central government in Jakarta - as a possible compromise to calls for independence in Aceh. As a Nov. 29 Jakarta Post editorial pointed out, federalism is still a "dirty word" to many Indonesians, whose constitution calls for a highly centralized government, a unitary state.

Along with former rival Amien Rais, Wahid apparently believes that federalism is now the only recourse to safeguarding unity and stability. Rais, chairman of National Mandate Party (PAN), leads the "axis force," the coalition that helped bring together Wahid's current government. Both men are the former heads of the two largest Muslim groups in Indonesia.

The decision by these two formal rivals to pursue federalism may be driven by a desire to break up the old Sukarno and Suharto empires, both of which lie in the rich natural resources in the provinces. Federalism would give the provinces significant control over these resources and effectively redistribute the country's wealth. Opponents of such redistribution include conservative elements of the Golkar Party, Megawati and her Indonesian Democratic Struggle Party (PDI-P) and the Indonesian armed forces.

All Wahid's opponents are linked to the old regimes and advocate keeping power concentrated in Jakarta for good reason: they do not want to lose the wealth they amassed during the Sukarno and Suharto eras. As well, Megawati is a fervent nationalist. She is the daughter of former President Sukarno, the founding father of unified Indonesia.

Wahid's Cabinet is now falling apart, deeply divided by disparate visions of the future of Indonesian unity. Many signs of turmoil have emerged in the past weeks. For example, members of the United Development Party (PPP), the largest party in the axis coalition, have accused Megawati's PDI-P of attempting to undermine the coalition and discredit the government.

Not surprisingly, Megawati's party seems to be at the center of the disturbance. In recent weeks, her party has sought to censure Amien Rais, specifically because he supports federalism. In a formal request to the Indonesian Congress (DPR), the PDI-P faction argued, "Amien Rais's statement on federalism is against his official oath as the people's representative which requires him to remain loyal to the Pancasila (the state ideology) and the Unitary State of the Republic of Indonesia." The PDI-P also emphasized that it would defend the Unitary State "at all cost."

But Wahid's calls for federalism have ruffled the feathers of a far more powerful bird: the military, which exerts a great deal of influence over the government. Under both Sukarno and Suharto, the military was set up specifically to be the backbone of a unitary Indonesia; federalism is directly at odds with its job description. Many of its members hold official government positions. As well, former armed forces chief Wiranto, now coordinating minister for political affairs and security, takes an authoritative role in cabinet meetings. According to Defense Minister Sudarsono in a Dec. 3 Washington Post interview, "Wiranto on occasion becomes effectively the president and the vice president as the same time."

With powerful forces aligning against him, Wahid is struggling to maintain unity among the elite. First, he has attempted to regain control of his Cabinet, recently pushing for the resignation of several members who may be linked to corruption or party factionalism, possibly planning to replace them with political unknowns who also support federalism. He has used the calls for resignation to attack Golkar, one element of the anti-federalism opposition. Golkar is an easy target, due to its links to the old regime. Although he has still not announced the names of those targeted, numerous reports in Indonesian media suggest that they are Golkar members. However, this will not solve his problems, since his stronger foes remain almost untouchable. Megawati's popular support is too strong to attack; meanwhile, the military would not hesitate to respond to threats with force.

As such, Wahid and elements close to him have made efforts to placate the military. Most recently, his Foreign Minister Alwi Shihab said the government would not hand over any generals to the United Nations to be tried for human rights abuses in East Timor. Defense Minister Sudarsono has also defended the generals, saying, "We can't go up into the high ranks, as they were just carrying out state policy."

Wahid is clearly under pressure, and may be forced to retreat from the controversial issues of federalism in order to hold together the disintegrating unity of the elite. He may have one card to play in response to pressure from the nationalists: the Muslims. Although Wahid's recent attempts to re-establish ties with Israel have upset many Muslims, his role as a great Muslim leader - coupled with that of Rais, his partner in the federalism debate - could help check waning political sway.

Yet Wahid's recent actions suggest he is not confident in his position, whether he holds the Muslim card or not. The wheels of dissent are already turning, and will accelerate as the country's provinces continue to assert themselves.

Meanwhile, the influence of Megawati will continue to grow. Her party is capable of exerting significant influence: PDI-P holds several key Cabinet positions, and the largest number of votes in the legislature. The disintegration of the Cabinet will only strengthen her position. With the military already holding significant power over the government, the alliance of the two could completely undermine Wahid's influence. Bound together by nationalism and a determination to protect Sukarno's Unitary State of Indonesia, Megawati and the military could soon dominate the government.