Sunday, December 9, 2012

Berkeley Mafia and Indonesia's 1965 Genocide - Part 3

Indonesia's powerful ministers known as Berkeley Mafia
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 (the "Berkeley Mafia") his Team of Experts for Economic and Financial Affairs, an idea Ford man Frank Miller claims as his own.

Armed with Sadli's January 10, 1967, investment law, the economists could put on their old school ties and play host to the lords of the great American corporations. In August the Stanford Research Institute - a spin-off 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 costly."

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 .. . treasure house 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."

Harvard: Bringing it all back home

"We couldn't have drawn up a more ideal scenario than what happened. 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." – Gus Papanek, Chief of the Harvard Development Advisory Service

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," observed a well-placed insider in 1966.

That same year, Sumitro slipped quietly into Djakarta, opened a business consultancy and prepared himself for high office. The prospect was not long in coming. Having received its bona fides from the lords of international finance, the Indonesian generals' regime was ready to name its "Development Cabinet." 

In June 1968 Suharto organized an impromptu reunion for the class of Ford, known in Djakarta as the "Berkeley Mafia."

As Minister of Trade and Commerce he appointed Dean Sumitro (PhD, Rotterdam); as Chairman of the National Planning Board he appointed Widjojo (PhD, Berkeley, 1961) ; as Vice Chairman, Emil Salim (PhD. Berkeley, 1964); as Secretary General of Marketing and Trade Research, Subroto (Harvard, 1964); as Minister of Finance, Ali Wardhana (PhD, Berkeley, 1962) ; as Chairman of the Technical Team of Foreign Investment, Mohamed Sadli (MS, MIT. 1956); as Secretary General of Industry, Barli Halim (MBA, Berkeley, 1959). "Koko" 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." To make the most of the opportunity, Ford provided the Indonesians with a post-graduation present - a development team from Harvard.

Since 1954, Harvard's Development Advisory Service (DAS), the Ford-funded elite corps of international modernizers, had brought Ford influence to the national planning agencies of Pakistan, Greece, Argentina, Liberia, Colombia, Malaysia andGhana.

Officially the Harvard-DAS Indonesia project began July 1, 1968. But DAS head Gus Papanek had people in the field well before that, joining with AID's Cal Cowles in bringing back the old Indonesia hands of the '50s and '60s.

"Ko Ko" Soedjatmoko.
Dave Cole returned to work with Widjojo on the Ford/Harvard payroll. Leon Mears, the agricultural economist who had learned Indonesian rice-marketing in the Berkeley project, came for AID and stayed on for Harvard. Sumitro's old buddy 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 got them bounced from Pakistan. "We stay in the background."

They stayed in the background for 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 don't know."

The plan went into force without fanfare in January 1969. With its key elements being foreign investments and agricultural self-sufficiency, it is a late-20th Century American "development" plan that sounds suspiciously like the mid-19th century Dutch colonial strategy.

Then, Indonesian labor - often corvee - 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" change in Indonesian social - i.e., 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 a 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 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, but if they raise a ruckus they are sabotaging a national program and must be PKI agents, and the soldiers are called in.

The Indonesian ruling class, observes Dutch scholar Wertheim, is now "openly waging [its] own brand of class struggle." 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," Papanek reported in October 1968: "A really widespread public works program, financed by increased imports of PL480 ["Food for Peace"] commodities sold at lower prices, could provide quick economic and political benefits in the countryside."

Harvard is pushing its Indonesian New Deal with 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. 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 300,000-man Army itself. The other is composed of the 120,000 political prisoners still being held after the Army's 1965-1966 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, for whom the government's daily food expenditure is slightly more than a penny.

At least two journalists have reported on Sumatran prisoners quartered in the middle of a Goodyear rubber plantation where they had worked before the massacres as members of a PKI union. Now, the correspondents report, they daily work its trees for the substandard wages paid to their guards.

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.

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 is it the foreign investment plank of the five-year plan that is the pay-off of Ford's 20-year-long strategy in Indonesia and the pot of gold that the Ford modernizers - both American and Indonesian - are paid to protect.

The 19th century Colonial Dutch strategy built an agricultural export economy. But the Americans are interested primarily in resources, mainly mineral.

Freeport Sulphur will mine copper on West Irian. Inter-national Nickel has got the Celebes' nickel. Alcoa is negotiating for most of Indonesia's bauxite. Weyerhaeuser. Inter-national 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 caoline. The Japanese will take home the archipelago's shrimp and tuna and dive for her pearls.

Another unmined resource is Indonesia's 120 million inhabitants - half of 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 a day.

But the real prize is oil. During one week in 1969, 23 companies, 19 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.

Ford, like an over-attentive mother. is sponsoring a new Berkeley project at the U.C. law school in "developing human resources for the handling of negotiations with foreign investors in Indonesia."

Meanwhile in Indonesia, the "chaos" that Ford and its modernizers are forever preventing is once more gathering force. Late last year, troops from West Java's crack Siliwangi division rounded up 5000 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."

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, now landlords and officers fear going out after dark. Those who do so are sometimes found in the morning with their throats cut. The generals mutter about "night PKI."

(David Ransom, a member of the Pacific Studies Center, is currently at work on a book on Indonesia. His views do not necessarily represent those of the Center.)