It was two years after the purge began, in 1967, the same year that Suharto assumed the presidency, that my mother and I arrived in Jakarta, a consequence of her remarriage to an Indonesian student whom she’d met at the University of Hawaii. I was six at the time, my mother was twenty-four.
President Suharto turned to a cadre of American economists to design Indonesia’s development plan, based on free-market principles and foreign investment. American development consultants formed a steady line outside government ministries, helping to manage the massive influx of foreign assistance from the U.S. Agency for International Development and the World Bank. As far as the U.S. was concerned, Indonesia had become a model of stability, a reliable supplier of raw materials and importer of Western goods, a stalwart ally and bulwark against communism.
For twenty-five years, in fits and starts, Indonesia’s economy continued to grow. Jakarta became a metropolis of almost nine million souls, with skyscrapers, slums, smog, and nightmare traffic. Men and women left the countryside to joint the ranks of wge labor in manufacturing plants built by foreign investment, making sneakers for Nike and shirts for Gap.
By any measure, Suharto’s rule was harshly repressive. Arrests and torture of dissidents were common, a free press nonexistent, elections a mere formality. When ethnically based secessionist movements sprang up in areas like Aceh, the army targeted not just guerrillas but civilians for swift retribution – murder, rape, villages set afire. And throughout the seventies and eighties, all this was done with the knowledge, if not outright approval, of U.S. administrations.
Then, in 1997, the bottom fell out. A run on currencies and securities throughout Asia engulfed an Indonesian economy already corroded by decades of corruption. The rupah’s value fell 85 percent in a matter of months. Indonesian companies that had borrowed in dollars saw their balance sheets collapse. In exchange for a $43 billion bailout, the Western-dominated International Monetary Fund, or IMF, insisted on a series of austerity measures [cutting government subsidies, raising interest rates] that would lead the price of such staples as rice and kerosene to nearly double. By the time the crisis was over, Indonesia’s economy had contracted almost 14 percent. Riots and demonstrations grew so severe that Suharto was finally forced to resign, some forty-eight parties vying for seats and some ninety-three million people casting their votes.
And anti-American sentiment, almost nonexistent during the Suharto years, is now widespread, thanks in part to perceptions that New York speculators and the IMF purposely triggered the Asian financial crisis. In a 2003 poll most Indonesians had a higher opinion of Osama bin Laden than they did of George W. Bush.
All of which underscores perhaps the most profound shift in Indonesia – the growth of militant, fundamentalist Islam in the country. In many ways Indonesian serves as a useful metaphor for the world beyond our borders – a world in which globalization and sectarianism, poverty and plenty, modernity and antiquity constantly collide.
The Shock Doctrine by Naomi Klein, 2007
A group of Indonesian economists who had been educated at the University of California at Berkeley, known as the Berkeley Mafia, prepared the economic blueprint for the country’s future.
The parallels with the Chicago Boys were striking. The Berkeley Mafia had studied in the U.S. as part of a program that began in 1956, funded by the Ford Foundation. They had also returned home to build a faithful copy of a Western-style economics department, theirs at the University of Indonesia’s Faculty of Economics.
Ford-funded students became leaders of the campus groups that participated in overthrowing Sukarno, and the Berkeley Mafia worked closely with the military in the lead-up to the coup, developing “contingency plans” should the government suddenly fall.
This economic team was not anti-state radicals like the Chicago Boys. They believed the government had a role to play in managing Indonesia’s domestic economy and making sure that basics, like rice, were affordable. However, the Berkeley Mafia could not have been more hospitable to foreign investors wanting to mine Indonesia’s immense mineral and oil wealth described by Richard Nixon as “the greatest prize in the Southeast Asian area.”
In 1974, nationalist riots broke out in Indonesia against “foreign subversion” of the economy; the Ford Foundation became a target of popular outrage – it was the foundation, many pointed out, that had trained Suharto’s economist to sell Indonesia’s oil and mineral wealth to Western multinationals.
The more indiscriminate massacres for which Suharto is infamous were, for the most part, delegated to religious students. They were quickly trained by the military and then sent into villages to “sweep” the countryside of Communists. Suharto then sent out his soldiers to hunt down four to five thousand leftists on his “shooting lists,” as the CIA referred to them; the U.S. embassy received regular reports on their progress.
After more than thirty years, Indonesia was still under the control of General Suharto. Suharto, however, had become less compliant with the West in his old age. After decades of selling off Indonesia’s oil and mineral wealth to foreign corporations, he had grown bored with enriching others and had spent the previous decade or so taking care of himself, his children and his golfing buddies.
For a few months, Suharto tried to resist the IMF, issuing a budget that did not contain the massive cuts it was demanding. The Washington Post predicted that the IMF would punish Indonesia by withholding billions in promised loans. As soon as the article appeared, Indonesia’s currency fell through the floor, losing 25 percent of its value in a single day. Guaranteeing that the final IMF negotiations would go smoothly, he brought back the Berkeley Mafia.
Anger in Indonesia did, finally, direct itself at Suharto and the presidential palace. For three decades, Indonesians had been kept more or less in line by the memory of the bloodbath that brought Suharto to power, a memory that was refreshed by periodic massacres in the provinces and in East Timor. Anti-Suharto rage had burned under the surface all this time, but it took the IMF to pour the gasoline – which it did, by demanding that he raise the price of gasoline. After that, Indonesians rose up and pushed Suharto from power.
