ASEAN
16 March 2025
The Indonesia that America created
Donald Trump’s administration seems to be unaware that modern day Indonesia is in many ways an American creation.
Donald Trump’s Defence Secretary Pete Hegseth stumbled at his Senate hearing when he appeared to be unfamiliar with Association of Southeast Asian Nations (ASEAN) and its member countries. It is extremely troubling when the defence leader of the most powerful country in the world is unaware of an important regional bloc with which the US has close ties, and Indonesia, its leading country.
In fact, Indonesia is the world’s fourth most populous country, with a population of 283 million, and has the world’s largest Muslim population. Further, it is an emerging powerhouse with the world’s seventh largest economy in purchasing power parity terms, and it is an emerging democracy.
Perhaps most curiously, modern day Indonesia is essentially a country created by the US, even though much of the US establishment pays little attention to Indonesia these days, not just Hegseth.
Indonesian independence would not come so quickly. The Dutch wanted to restore their colonial rule in light of their political and economic interests, which led to a four-year war for Indonesian independence. By 1949, with the US threatening to cut off Marshall Plan aid for the Netherlands’ postwar reconstruction, the Dutch transferred sovereignty over the Dutch East Indies to the Republic of the United States of Indonesia—although the Dutch did retain sovereignty over the western half of the island of New Guinea (West Papua).
The fear of communism was the motivating factor for US action. With the burgeoning Cold War in Europe, the US did not want stability and reconstruction of the Netherlands to be distracted by Indonesia. It also recognised that failure to support Indonesian nationalism might cause Indonesian nationalists to turn to the Communists for support.
Then the US entered the fray again given its desire to keep Indonesia on its side of the Cold War. The Kennedy administration feared an Indonesian drift towards Communism and wanted to court Sukarno away from the Soviet bloc and Communist China. Therefore, the US engineered an agreement between Indonesia and the Netherlands, by which in 1962 control of West Papua was given to the United Nations, and one year later was transferred to Indonesia. Ever since, there has been an ongoing conflict between Jakarta and the Free Papua Movement.
Sukarno was a nationalist, not a communist. But he was heavily reliant on support from the Indonesia Communist Party (PKI) as it enabled him to mobilise mass support for his own political objectives. Under Sukarno, the PKI became the largest communist party in the world outside of China and the Soviet Union. The US believed there was a real danger that Indonesia would fall to the communists.
Then Sukarno emerged as a leader of the Third World when he organised an important meeting of the countries of Asia and Africa – the 1955 Bandung Conference. The mission was to stand up against former colonial masters and challenge the rules of the world order. Sukarno’s government began nationalising foreign-owned plantations and mines. US and British relations with Indonesia deteriorated further when Sukarno picked a fight (“konfrontasi”) with the British over the formation of Malaysia.
The next year, elements of the Indonesian military, with the support of the CIA, rebelled against the rule of President Sukarno. This attempted coup ended in failure. Then for years, the US trained and strengthened the Indonesian army. From 1958 to 1963, it hosted thousands of Indonesian army officers in Kansas to give them training in anti-communism and in American values. This also included late night visits to salacious bars and generous stipends.
The murder of six of Indonesia’s most senior army leaders on 1 October 1965 by elements of the PKI became a major turning point in Indonesia’s modern history. In the ensuing turmoil, General Suharto was able to take control of the military, ultimately edging Sukarno out of the presidency and becoming the second and longest serving president of Indonesia. Under Suharto’s leadership, the military and related organisations orchestrated a ‘politicide’ in which at least half a million leftists were killed.
At every step, the US backed and assisted in the massacre. The CIA handed over lists of alleged communists to the Indonesian military. Suharto became a faithful US ally, benefiting from aid and opening the economy to US companies. American business interests, meanwhile, benefited greatly from the Suharto regime.
The overthrow of Sukarno by Suharto and the liquidation of the PKI in Indonesia was a major turning point in the Cold War. It was critical for the US construction of a capitalist world order and bringing countries around the world into its sphere of influence. In the early 1960s, the US foreign policy establishment was convinced Indonesia was far more important than Vietnam. Indeed, in a short time the US achieved in Indonesia what it didn’t achieve in a bloody decade in Indochina.
Much has also happened in Indonesia since these times. But Indonesia remains a good partner of the West, even though it carefully avoids taking sides in the current great power rivalry. We can only regret that in recent years the US has had difficulty finding much time to invest in this important friendship—something which will likely get worse with the changes in Washington.
In fact, Indonesia is the world’s fourth most populous country, with a population of 283 million, and has the world’s largest Muslim population. Further, it is an emerging powerhouse with the world’s seventh largest economy in purchasing power parity terms, and it is an emerging democracy.
Perhaps most curiously, modern day Indonesia is essentially a country created by the US, even though much of the US establishment pays little attention to Indonesia these days, not just Hegseth.
US works to ensure Indonesian independence
Indonesia entered the modern world in the 1600s, when the Dutch East India Company began colonising parts of the archipelago. It came under the administration of the Dutch government as the Dutch East Indies in 1800. During World War 2, Japan occupied the Dutch East Indies from March 1942 until the end of the war. Then Sukarno and Mohammad Hatta, as president and vice-president, immediately declared Indonesia’s independence.Indonesian independence would not come so quickly. The Dutch wanted to restore their colonial rule in light of their political and economic interests, which led to a four-year war for Indonesian independence. By 1949, with the US threatening to cut off Marshall Plan aid for the Netherlands’ postwar reconstruction, the Dutch transferred sovereignty over the Dutch East Indies to the Republic of the United States of Indonesia—although the Dutch did retain sovereignty over the western half of the island of New Guinea (West Papua).
The fear of communism was the motivating factor for US action. With the burgeoning Cold War in Europe, the US did not want stability and reconstruction of the Netherlands to be distracted by Indonesia. It also recognised that failure to support Indonesian nationalism might cause Indonesian nationalists to turn to the Communists for support.
West Papua becomes Indonesian
From 1950 onwards, the Dutch and the Western powers agreed that the Papuans should be given an independent state. But the Indonesian government argued that it was a successor state to the whole Dutch East Indies, even though there are no ethnic linkages between the West Papuans and Indonesians. Their only commonality is that they were both part of the Dutch East Indies.Then the US entered the fray again given its desire to keep Indonesia on its side of the Cold War. The Kennedy administration feared an Indonesian drift towards Communism and wanted to court Sukarno away from the Soviet bloc and Communist China. Therefore, the US engineered an agreement between Indonesia and the Netherlands, by which in 1962 control of West Papua was given to the United Nations, and one year later was transferred to Indonesia. Ever since, there has been an ongoing conflict between Jakarta and the Free Papua Movement.
Sukarno becomes Washington’s bogeyman
The US was not yet done with Sukarno’s Indonesia, however. This was a period when the Cold War was heating up. The US was increasingly involved in the conflict in Vietnam. For his part, Sukarno became a bogeyman for Washington. In a delicate balancing act, Sukarno attempted to court both sides of the Cold War.Sukarno was a nationalist, not a communist. But he was heavily reliant on support from the Indonesia Communist Party (PKI) as it enabled him to mobilise mass support for his own political objectives. Under Sukarno, the PKI became the largest communist party in the world outside of China and the Soviet Union. The US believed there was a real danger that Indonesia would fall to the communists.
Then Sukarno emerged as a leader of the Third World when he organised an important meeting of the countries of Asia and Africa – the 1955 Bandung Conference. The mission was to stand up against former colonial masters and challenge the rules of the world order. Sukarno’s government began nationalising foreign-owned plantations and mines. US and British relations with Indonesia deteriorated further when Sukarno picked a fight (“konfrontasi”) with the British over the formation of Malaysia.
US turns on Sukarno
In 1957, US President Eisenhower ordered the CIA to overthrow the Sukarno government. So the CIA moved into action, generously funding a right-wing Muslim party, with little effect. In 1958, the CIA backed armed regional rebellions against the central government, only calling off operations after American pilot Allen Pope was captured while conducting bombing operations that killed Indonesian soldiers and civilians.The next year, elements of the Indonesian military, with the support of the CIA, rebelled against the rule of President Sukarno. This attempted coup ended in failure. Then for years, the US trained and strengthened the Indonesian army. From 1958 to 1963, it hosted thousands of Indonesian army officers in Kansas to give them training in anti-communism and in American values. This also included late night visits to salacious bars and generous stipends.
The murder of six of Indonesia’s most senior army leaders on 1 October 1965 by elements of the PKI became a major turning point in Indonesia’s modern history. In the ensuing turmoil, General Suharto was able to take control of the military, ultimately edging Sukarno out of the presidency and becoming the second and longest serving president of Indonesia. Under Suharto’s leadership, the military and related organisations orchestrated a ‘politicide’ in which at least half a million leftists were killed.
At every step, the US backed and assisted in the massacre. The CIA handed over lists of alleged communists to the Indonesian military. Suharto became a faithful US ally, benefiting from aid and opening the economy to US companies. American business interests, meanwhile, benefited greatly from the Suharto regime.
The overthrow of Sukarno by Suharto and the liquidation of the PKI in Indonesia was a major turning point in the Cold War. It was critical for the US construction of a capitalist world order and bringing countries around the world into its sphere of influence. In the early 1960s, the US foreign policy establishment was convinced Indonesia was far more important than Vietnam. Indeed, in a short time the US achieved in Indonesia what it didn’t achieve in a bloody decade in Indochina.
Much has also happened in Indonesia since these times. But Indonesia remains a good partner of the West, even though it carefully avoids taking sides in the current great power rivalry. We can only regret that in recent years the US has had difficulty finding much time to invest in this important friendship—something which will likely get worse with the changes in Washington.