Indonesia

Press, Volume XCIII, Issue 27913, 9 March 1956, Page 10

Indonesia

The fulsome praise for Russian sympathy, issued by the Indonesian Embassy in Moscow, is no more extraordinary than the excuse given for it. According to the Charge d’Affaires (Mr Darmanto) it was to “ anticipate comments ... in the “ Netherlands and other countries “ [on the abrogation of union with “ the Netherlands] which might “ reach Moscow The only plausible explanation is Indonesian anxiety that the Russians should not see in the new economic freedom a movement towards encouraging greater American investment. The abrogation by Indonesia of the union and economic agreements, which the Dutch have not accepted, was made after negotiations in Geneva between representatives of the Netherlands and Indonesia. One of the Indonesian objectives at these talks, though it was not plainly stated, was to establish the principle of equality of treatment for investors from all foreign countries. Some British organisations are interested in new opportunities in the development of a potentially wealthy country, and so, no doubt, are Americans. In the tangled state of Indonesian politics, pending the meeting next month of

the newly elected Parliament, the caretaker Government, moderate in outlook, is probably unwilling to offend Russia and stir up the opposition of its own Leftist parties. Although the Indonesian Communists polled a fifth of the votes in the election, the probability is that they can be kept out of the coalition that must be formed to take over from Dr. Harahap’s Ministry. The Nationalist Party- moderate wing seems to have accepted the view that, since Indonesia’s foreign policy should be independent, it would be unwise to include Communists. It has arranged, instead, a coalition with two moderate Moslem parties, the pro-Western Masjumi (which has figured prominently in Indonesian governments) and the Nahdatul Ulama, which scored an unexpected success in the election and is probably closer to the people than any other party. The business, of forming governments is as difficult in Jakarta as it is in Paris; and the echoes can sometimes be heard as far as Moscow. Should the Masjumi Party retain much influence in the new Government, Dr. Sumitro, the driving force behind recent economic policy, may be able to continue his work as Finance Minister. In this capacity he has shown administrative competence not generally found among administrators in Jakarta. While the Government has been unable to restore political order in its unwieldy territories, or give evenhanded justice in its courts, Dr. Sumitro has been able to get the national finances into order. Although he assumed office only last August he has rescued Indonesia from the crisis into which it had drifted under his predecessor. His achievement is shown by a surplus in the balance of payments in the third quarter of last year, a reduction of nearly 25 per cent, in the money supply, a nearly-balanced Budget, and reduced food prices. This would be a hot pace in any country. Whether Dr. Sumitro can keep it up and establish Indonesia’s economy soundly for a long term lies in the future, provided he gets his opportunity. But his skill and determination have impressed foreign observers. It would be worth placating Moscow to retain his technical services.