The Press TUESDAY, JULY 12, 1966. Indonesia: A Fresh Start

Press, Volume CVI, Issue 31109, 12 July 1966, Page 16

The Press TUESDAY, JULY 12, 1966. Indonesia: A Fresh Start

Now that the Sukarno era has ended, Indonesia’s most urgent need is for some unemotional, bread-and-butter political thinking. 1116 republic has been described as the world’s leading exponent of bankruptcy. The facts support that conclusion. The current analysis of President Sukarno’s six years of “guided democracy” has already produced some chilling figures. Foreign exchange reserves stand at approximately 8 million dollars, external debts at about .2355 million dollars, of which some 530 million dollars are due for repayment this year. It is small wonder that the Minister in charge of the economy, the Sultan of Jogjakarta, named as the first imperative an approach to Indonesia’s foreign creditors for a limited moratorium, a respite in which means might be found to service loan repayment The Sultan has made a start by visiting Japan to negotiate some rephasing of debt; and Mr Malik, third member of the ruling triumvirate (General Suharto is the second), is to attempt a similar task in Moscow this month. Russia is the largest creditor. There will, of course, be other approaches—currently to the United States and Britain, and no doubt in due course to the financial agencies of the United Nations, once Indonesia’s status there has been restored. Yet it is estimated that, in the best of circumstances, it will take at least five years to get the economy back to something approximating balance. Appalling roads are a drag on transport, and rubber, coal, and tin production has declined. Export earnings this year, it is thought, may amount at the most to about 450 million dollars. Imports, moreover, cannot be cut without imposing very real hardship on a long-suffering people. The immediate search, apart from debt rearrangement, will be for overseas credits and probably trained personnel to assist industrial recovery; and so far the credits are not in sight. Probably the political situation, including the ending of confrontation and the beginning of economic co-operation with Malaysia and Singapore, will have to be completely stabilised before the Western nations and Russia will be willing to assist in debt clearance, in the provision of food, yarn for idle textile mills, plant for road construction, rolling stock for railways, and so on. The list could be extended almost indefinitely.

Indonesia’s membership of the United Nations, it is expected, will be resumed without difficulty—perhaps as early as next month—and that could open the way for material assistance from other member States. The new leadership in Djakarta claims that Indonesia never actually left the world body—that Dr. Sukarno simply had its name removed from the list of seated delegations and suspended the payment of assessments. The presumption is that Indonesia may now return as an old member, provided the “ crush Malaysia ” policy is wholly discarded and there is some token payment of dues. A side effect of this development would almost certainly be the acute embarrassment and further isolation of Communist China. The Djakarta-Peking axis has already been destroyed, as has Peking’s bid to weaken or destroy the United Nations by the creation of a rival Afro-Asian organisation. The failure of that bid has come, ironically, at a time when China herself may seem closer to acceptance than she has ever been—even if Mr Mao’s Government might still be inclined to spurn an invitation to join.