Acting Presidency of Suharto


Acting Presidency of Suharto

The Acting Presidency of Suharto followed the Transition to the New Order in which General Suharto was the President albeit on an interim basis. The term lasted from 12th March 1967 until 27th March 1968 when Suharto was officially elected as President of the Republic of Indonesia.

Election to the Acting Presidency

By February 1967, President Sukarno realized that his political career was at an end and he became concerned at cutting his losses. On 7th February, he sent a letter to Suharto saying that he was willing to hand over the running of the Government to the General but also added that he would like to continue on as Head of State. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |publisher= The Press Syndicate of the University of Cambridge |location= UK |language= |id=ISBN 0-521-77326-1 |pages= p. 156 ] In the time between the arrival of that letter and the formulation of the reply, the People’s Representative Council (DPR) passed a resolution which called for a Special Session of the Provisional People’s Consultative Assembly (MPRS). Suharto, accompanied by the Commanders of the Navy, Air Force, and Police, met with Sukarno on the 11th February to reject his offer and to wait instead for the result of the MPRS Special Session. [cite news
author = MIS
url = http://www.tempo.co.id/ang/min/02/05/utama7.htm
title = Saat-Saat Jatuhnya Presiden Soekarno: Perjalanan Terakhir Bung Besar
publisher = Tempo
date = 1997-04-05
accessdate = 2007-11-25
]

On 20th February 1967, Sukarno chose to step down and hand over executive power to Suharto whilst still retaining his position as Head of State. [cite news
author = MIS
url = http://www.tempo.co.id/ang/min/02/05/utama7.htm
title = Saat-Saat Jatuhnya Presiden Soekarno: Perjalanan Terakhir Bung Besar
publisher = Tempo
date = 1997-04-05
accessdate = 2007-11-25
] Sukarno's decision did not stop the DPR from insisting that the MPRS Special Session go ahead. Originally calling for an MPRS Special Session to be held for the purpose of reviewing Sukarno’s performance as well as reaching a final decision on whether or not he was involved with the 30 September Movement (G30S), the DPR now asked that the MPRS Special Session add Suharto's election as Acting President to the agenda.

The Special Session was opened on 7th March 1967. On that day, Suharto delivered a speech absolving Sukarno of any involvement with the G30S. [cite book |last= Hughes |first= John |title= The End of Sukarno: A Coup That Misfired: A Purge That Ran Wild |origyear= 1967 |edition= 3rd |year= 2002 |publisher= Archipelago Press |location= Singapore |language= English |id=ISBN 981-4068-65-9 |pages= p. 290 ] The Special Session now turned on the matter of the Presidency. Such was the intensive debate surrounding this matter that the Special Session did not finish on 11th March 1967 as intended but had to go for another extra day. But when the decision was finally made, it was unanimous. On 12th March 1967, the MPRS agreed to withdrew its mandate from Sukarno and remove him as President. Replacing Sukarno, in the capacity of Acting President would be Suharto.

Cabinet

Suharto retained the Ampera Cabinet which had been formed by him in July 1966. He would reshuffle this Cabinet in October 1967 and create the Revised Ampera Cabinet.

Home Affairs

Legislative Elections

The 1966 MPRS General Session passed a resolution calling for Legislative Elections to be held no later than 5th July 1968 [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 144 ] and this became one of the first matters that Suharto attempted to address during his Acting Presidency. In doing this, he would have to deal with political parties. [The political parties were the Indonesian National Party (PNI), NU, the Indonesian Islamic Union Party (PSII), the Islamic Educational Movement (Perti), the Indonesian Christian Party (Parkindo), the Catholic Party, the Indonesian Independence Supporters’ Union (IPKI), Murba, and the Joint Secretariat of the Functional Groups (Sekber Golkar)]

For the political parties, the main point of contention was whether the Legislative Election will use the district system or proportional representation. [cite book |last= Notosusanto |first= Nugroho |title= Tercapainya Konsensus Nasional: 1966-1969 |origyear= 1985 |publisher= Balai Pustaka |location= Jakarta |language= Indonesian |pages= p. 49 ] In the previous year, ABRI had expressed interest in the district system and as such handed to the DPR an election bill which favors the district system. The bill was successfully blocked in the DPR as the list of parties not wanting change to the district system included the Indonesian National Party (PNI) and Nadhlatul Ulama (NU). With time running out until the 1968 Legislative Elections, Suharto needed to hammer out a compromise.

Suharto held a series of meetings during the first three months of his Acting Presidency with the leadership of the political parties. To accommodate the political parties, Suharto backed out of the notion of a district system and began supporting proportional representation; the trade-off being that the Government would be able to appoint some of the DPR members. [cite book |last= Notosusanto |first= Nugroho |title= Tercapainya Konsensus Nasional: 1966-1969 |origyear= 1985 |pages= p. 49 ] The breakthrough was made on 25th July 1967 when the political parties agreed that the Legislative Elections will be held using proportional representation, that the Government will appoint 100 out of the 460 DPR members, and that the Government will appoint 1/3 of the members of the new People's Consultative Assembly (MPR).

Despite the breakthrough it quickly became clear that it would be difficult to meet the deadline set by the MPRS. The bill would have to be rewritten and would have to go through the proper procedures before it could be passed. The bill was resubmitted to the DPR on 16th December 1967 but by January 1968, Suharto reported to the Chairman and Vice-Chairmen of the MPRS that it would be impossible to hold a Legislative Election in 1968. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 164 ]

Dealing with Sukarno

The MPRS Resolution which appointed Suharto to the Acting Presidency also gave him the power to take legal action against Sukarno. Suharto chose not to take any legal action and instead, Sukarno was still allowed to reside at the Presidential Palace and enjoy his freedom. Suharto also continued to insist that Sukarno was still the Head of State. Speaking on 13th March 1967, Suharto insisted that Sukarno was still President and Head of State, although without the political power that came with the office. This state of affairs did not last long. By May, Suharto decided that Sukarno was no longer allowed to use the title of President of the Republic of Indonesia and placed the former President under house arrest at Bogor Palace. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= pp. 157-159 ]

Other

During the course of 1967, Suharto confirmed that West Papua would be given a plebiscite concerning the matter of integration with Indonesia. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p.178 ]

On 12th September 1967, he signed a bill into a law which approved the formation of Bengkulu Province [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196709.htm
title = UU 9/1967, PEMBENTUKAN PROPINSI BENGKULU
publisher = UN Mission in Timor
date = 12th September 1967
accessdate = 2007-11-25
]

Foreign Affairs

The idea of pooling together the nations of South-East Asia into one organization came from Thanat Khoman the Thai Minister of Foreign Affairs. [cite news
last = Khoman
first = Thanat
url = http://www.aseansec.org/thanat.htm
title = ASEAN Conception and Evolution
publisher = ASEAN Website
accessdate = 2007-11-25
] He suggested the idea to Indonesia's Minister of Foreign Affairs, Adam Malik who promised to bring it up with Suharto. Suharto was interested in the idea and sent Malik to a conference in Thailand in August 1967. The conference was also attended by the Ministers of Foreign Affairs of Malaysia, Singapore, and Philippines. On 8th August 1967, the five Ministers signed the Bangkok Declaration which marked the formation of the Association of South East Asian Nations (ASEAN). The declaration called among other things for the cooperation to help accelerate economic growth and promote stability in the region. [cite news
coauthors = Adam Malik, S. Rajatnam, Tun Abdul Razak, Thanat Khoman and Marciso Ramos
url = http://www.aseansec.org/1212.htm
title = Bangkok Declaration
publisher = ASEAN Website
date = 8th August 1967
accessdate = 2007-11-25
]

The reversal of Sukarno's policy of Confrontation with Malaysia was completed with the establishment of diplomatic relations between Indonesia and Malaysia in early September 1967. [cite news
url = http://www.time.com/time/magazine/article/0,9171,899760,00.html?promoid=googlep
title = Ten Fruitful Years
publisher = Time
date = 8th September 1967
accessdate = 2007-11-25
] At the same time, diplomatic relations were also established with Singapore with the opening of an Indonesian Embassy there. [cite news
url = http://www.kbrisingapura.com/about_embhist.php?lang=eng
title = Embassy's History
publisher = Embassy of the Republic of Indonesia in Singapore
accessdate = 2007-11-25
] Running contrary to these two diplomatic successes was the deterioration of Indonesia's relationship with the People's Republic of China. The perception of the Indonesian Government was that China had backed the Indonesian Communist Party (PKI). The deterioration was not helped by the fact that the response to Indonesia's suspicion was the ideological zeal of China's Cultural Revolution. In October 1967, Indonesia announced that it was freezing diplomatic relations with China. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= pp. 162 ]

The emergence of Suharto as Acting President was well received by the West, who was keen to not only invest but give aid. Relationship with the Soviet Bloc cooled down but nevertheless, Suharto would work towards repaying the debt incurred during the Sukarno Government. More details can be seen later in this article.

Defense and Security

The first order of business for Suharto to give official recognition to ABRI's non-military role. Measures had been taken to create a doctrinal justification for ABRI's interference in non-military matters and this had culminated in August 1966 with the formulation of the Four Duties, One Function (Indonesian: "Catur Dharma Eka Karya" Acronym: Cadek) Doctrine. The doctrine stated that in addition to its defense and security role, ABRI also takes part and would serve in other fields outside of the aforementioned functions of defense and security. [cite book |last= Moertopo |first= Ali |title= Strategi Pembangunan Nasional |origyear= 1981 |publisher= CSIS |location= Jakarta |language= Indonesian |pages= p. 249 ] 31st March 1967, Suharto called on ABRI to adopt and implement Cadek.

The next step was to continue purging ABRI of PKI and Sukarnoist elements. With the Army,most intense purges happened in Central Java, East Java, and North Sumatra with the Commanders of the Regional Military Command (Kodam) supervising the areas in question leading the purge. [cite book |last= Crouch |first= Harold |title= The Army and Politics in Indonesia |origyear= 1978 |publisher= Cornell University Press |location= London |language= English |pages= pp. 233-234 ] Outside of the Army, the Air Force had been weakened enough by its alleged involvement with G30S. The Police tried to resist but political pressure became too strong for them to overcome. Only the Navy resisted, criticizing the purges as practice reminiscent of the Old Order.

Suharto also began reorganizing the Command Structure of ABRI. The first step was taken by stripping the Commanders of the Army, Navy, Air Force and Police of their Cabinet status in August 1967. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 182 ] Suharto's Acting Presidency also saw the establishment of the State Intelligence Coordinating Agency (BAKIN), [cite news
last = Sudiati
first = Wiwik
url = http://www.ruangbaca.com/ruangbaca/?doky=MjAwNw=&dokm=MDU=&dokd=MzA=&dig=YXJjaGl2ZXM=&on=VUxT&uniq=NDkx
title = Napas Tilak Dunia Intelijen Indonesia
publisher = Koran Tempo
date = 2007-05-30
accessdate = 2007-11-26
] another agency to ensure state security in addition to the Operational Command for the Restoration of Security and Order (Kopkamtib). In addition to all this, Suharto issued a regulation regarding pay for ABRI soldiers. The regulation provided provisions for pay, conditions for pay rise and the various types of allowances for the members of ABRI. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196714.htm
title = PP 14/1967, PERATURAN GAJI ANGGOTA ANGKATAN BERSENJATA REPUBLIK INDONESIA
publisher = UN Mission in Timor
date = 28th December 1967
accessdate = 2007-11-26
]

Beginning in July, Indonesia faced a security problem in the form of the North Kalimatan People's Forces (Paraku) and the People of Sarawak's Guerilla Forces (PGRS), two guerilla armies consisting of people of Chinese ethnicity, with communist leanings, and backed by Beijing. [cite news
url = http://www.time.com/time/magazine/article/0,9171,837587-1,00.html
title = Home for the Boomerang
publisher = Time
date = 15th December 1967
accessdate = 2007-11-26
] By the end of 1967, ABRI troops, working together with troops of Malaysia, had made progress but it was unknown as to when the conflict could have been decisively ended.

Justice

In an effort to help the Government form policy in this field, law enforcement agencies (The Supreme Court, the Ministry of Justice, the Office of the Attorney General, and the Police) held a conference in Cibogo, West Java. The agencies issued a joint communique which called for: elongating working days for legal procedures, increasing the amount of facilities for legal procedures, maximizing the amount of manpower for legal procedures, improving facilities, and improving coordination between the courts, the attorneys, and the police. [cite news
author = National Development Planning Agency (Bappenas)
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Bab-19-P-J-1973%20cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden Tahun 1968 s.d 1973 Bab XIX: Tertib dan Pembinaan Hukum
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-26
]

In the months leading up to Suharto’s assumption of the Acting Presidency, the trials of Old Order figures revealed that they had been very corrupt. To address this problem and to return any money that belonged to the state, Suharto formed the State Finance Supervision (Pekuneg) in April 1967. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p.152 ] However, it would not be long before accusations of corruption were thrown at the new Government. Suharto responded to this by forming the Abolition of Corruption Team (TPK) on 2nd December 1967. [cite news
last = Yuntho
first = Emerson
url = http://www.antikorupsi.org/docs/timtastipikoreson.pdf
title = Tim Koordinasi Pemberantasan Korupsi: Antara Harapan dan Kekhawatiran
publisher = Antikorupsi.org
date = 2005-07-04
accessdate = 2007-11-26
]

Economics and Finance

General Economic Conditions

By the end of 1967, the Suharto Government had been able to reduce inflation from 650% at the end of the previous year to 120%. [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Lampiran%201973%20cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Ikhtisar HASIL-HASIL PELAKSANAAN STABILISASI EKONOMI DAN PELITA I
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-26
]

Fiscal Policy

With regards to the budget, Suharto undertook a policy of a balanced budget and the Sukarno-era practice of printing extra money to raise funds when the budget runs short was discontinued. Technically speaking, however, Suharto’s budgets ran deficits because foreign aid and external borrowing are not supposed to be counted as revenue. [cite book |last= Hill |first= Hall |title= The Indonesian Economy Since 1966 |origyear= 1996 |publisher= University of Cambridge Press|location= Melbourne |pages= pp. 59-60 ]

The new Government also undertook a reform of the tax system. On 26th August 1967, the DPR passed the Amendment and Revision of Collection Methods for Income , Wealth, and Corporate Taxes Law with Suharto smoothing out the details through a Government Regulation (Peraturan Pemerintah). [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196708.htm
title = UU 8/1967, PERUBAHAN DAN PENYEMPURNAAN TATACARA PEMUNGUTAN PAJAK PENDAPATAN 1944, PAJAK KEKAYAAN 1932 DAN PAJAK PERSEROAN 1925
publisher = UN Mission in Timor
date = 26th August 1967
accessdate = 2007-11-26
] [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196711.htm
title = PP 11/1967, PERUBAHAN DAN PENYEMPURNAAN TATA CARA PEMUNGUTAN PAJAK PENDAPATAN 1944, PAJAK KEKAYAAN 1932 DAN PAJAK PERSEROAN 1925
publisher = UN Mission in Timor
date = 19th September 1967
accessdate = 2007-11-26
] Under the new tax system, the taxpayer has two methods by which they can pay tax. The first method is the individual tax counting ("menghitung pajak sendiri") method. Using this method it was up for the individual to count the amount of tax they are to pay and to hand the tax in to tax offices. The second method is the non-individual tax counting ("menghitung pajak orang lain") method. In this method an individual was appointed by the Head of the Tax Inspection to count and pay the taxes of other individuals. If the individual counting the tax abused their poistion, they could be subject to a fine of paying 100% tax . Under this system, the roles of a tax officials are reduced to giving information and making sure that the amount of tax that has been paid is accurate.

Monetary Policy

In terms of monetary policy, interest rates were kept between 6 and 9%. [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Lampiran%201973%20cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Ikhtisar HASIL-HASIL PELAKSANAAN STABILISASI EKONOMI DAN PELITA I
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-26
] Steps were also taken to reform the exchange rate system by the abolition of the multiple exchange rate of the Sukarno system in July 1967. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196709.htm
title = PP 9/1967, PENARIKAN KEMBALI NILAI LAWAN RUPIAH
publisher = UN Mission in Timor
date = 28th July 1967
accessdate = 2007-11-26
]

In May 1967, the liberalization of the banking sector was continued. ten foreign-owned banks and a joint venture bank were allowed to open. For the foreign-owned banks, the catch was that they were only allowed to operate in Jakarta. [cite news
url = http://www.bi.go.id/msmbiweb/sejarah_content3.asp?id=189
title = Langkah-Langkah Strategis 66-83
publisher = Cyber Museum Bank Indonesia
accessdate = 2007-11-26
] On 30th December 1967, the DPR passed the Fundamentals of Banking Law. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196714.htm
title = UU 14/1967, POKOK POKOK PERBANKAN
publisher = UN Mission in Timor
date = 30th December 1967
accessdate = 2007-11-26
] It was a law that categorized banks, their functions, and the guidelines for establishing banks. Further regulations were expounded by Suharto in February 1968. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196803.htm
title = PP 3/1968, BANK ASING
publisher = UN Mission in Timor
date = 16th February 1968
accessdate = 2007-11-26
]

Agriculture

With agricultural production still not functioning at maximum capacity, Suharto had to make due with ensuring that the supply of rice and the stability of price was guaranteed. On 10th May 1967, Suharto formed the Logistics Affairs Agency (Bulog), to look after these matters. [cite news
url = http://www.bulog.co.id/sejarah.php
title = Sejarah: Bulog Sebelum Menjadi Perum
publisher = Bulog
accessdate = 2007-11-26
] Its position was further strengthened when Suharto named it as the single purchasing agency for rice with Bank Indonesia as the single financing agency. Bulog immediately set a target of purchasing 597,000 tonnes of rice for the year but would delay when it comes to purchasing rice, preferring instead to wait until harvest season to make their purchase. [cite book |last= Crouch |first= Harold |title= The Army and Politics in Indonesia |origyear= 1978 |pages= p. 279 ] However the year’s harvest was bad and from September 1967 onwards there was a shortage of rice. Although the bad harvest meant that Bulog was unable to fulfill its target purchase, it had 280,000 tonnes of rice under its control. Nevertheless instead of sending its supply of rice to the market, Bulog focused instead on distributing rice to members of ABRI and the civil service. With high demand and no step being taken on the supply side, the price of rice had nowhere to go but up, its high price causing discontent within the population towards the end of the year.

On 8th July 1967, the DPR passed the Guidelines for Animal Husbandry and Health Law. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196706.htm
title = UU 6/1967, KETENTUAN KETENTUAN POKOK PETERNAKAN DAN KESEHATAN HEWAN
publisher = UN Mission in Timor
date = 8th July 1967
accessdate = 2007-11-26
] The law called for setting aside land to grow animal food as and vaccination against animal diseases as well as categorizing the different kinds of Farming Enterprises and calling on the Government to invest capital in animal husbandry.

Trade

In July 1967, the Government simplified export import procedures in addition to taking a step back and giving as well as assisting the private sector an opportunity to conduct trade. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196710.htm
title = PP 10/1967, PENYEDERHANAAN PROSEDUR EKSPOR DAN IMPOR
publisher = UN Mission in Timor
date = 28th July 1967
accessdate = 2007-11-26
] [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Bab-04-P-J-1973%20cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Bab IV: Neraca Pembayaran dan Perdagangan Luar Negeri
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-26
] For the year 1967, Indonesia was able to earn $770 million from its exports although it would spend $805 million from its imports and thus, running a trade deficit.

In earning $770 million from exports, $244 million was earned from exporting petroleum whilst $526 million was earned from non-petroleum exports. These non-petroleum exports included timber, rubber, coffee, tin, palm oil, tea, tobacco, pepper, copra, and palm seeds. Timber was the highest non-petroleum export, raking in $227.8 million. In spending $805 million on imports, $68 million was spent on petroleum whilst $737 million was spent on non-petroleum imports. Some of the non-petroleum imports included rice, flour, fertilizers, cement, paper, iron, steel, tractors, and aircraft. For the most part, the imports were raw materials which constituted 36.6% of the imports followed by consumption goods on 35.8% and capital goods on 27.6%.

Natural Resources

Mining

Mining, both for oil and mineral resources alike, received legal recognition under the Guidelines of Mining Law. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196711.htm
title = UU 11/1967, KETENTUAN KETENTUAN POKOK PERTAMBANGAN
publisher = UN Mission in Timor
date = 2nd December 1967
accessdate = 2007-11-26
] It gave guidelines for mining processes as well as giving private enterprise the opportunity to do business in the mining sector. Under this law, the private enterprises are to pay fees for the contract, exploration, and exploitation to the Government who in turn will hand it over to the Provincial and Regency Governments to be used for development. The importance of petroleum quickly become apparent by the fact that it was Indonesia's top export earner for the year 1967, bringing in $770 million's worth of revenue.

Forestry

In the field of forestry, the DPR passed the Guidelines of Forestry Law on 24th May 1967. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196705.htm
title = UU 5/1967, KETENTUAN KETENTUAN POKOK KEHUTANAN
publisher = UN Mission in Timor
date = 24th May 1967
accessdate = 2007-11-26
] The law outlines the categories of forests, from protected forests, which exists for the purpose of preventing floods and erosions to production forests, from which timber are cut down to be exported. It also set provision for nature reserves and forests set aside for the purpose of tourism.

In December 1967, Suharto issued regulations for private enterprises wishing to exploit Indonesian forests. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196722.htm
title = PP 22/1967, IURAN HAK PENGUSAHAAN HUTAN DAN IURAN HASIL HUTAN
publisher = UN Mission in Timor
date = 30th December 1967
accessdate = 2007-11-26
] Suharto set down the conditions for the private enterprises; first was that they would have to pay license fees and secondly, they would have to pay royalties to the Government based on the amount of forest that they intended to make a profit from. As part of the policy, Suharto regulated that the region from which the forest was exploited will have first priority in receiving the money made from the two fees for the purpose of regional development.

Investment and Foreign Aid

At the beginning of 1967, the Government passed the Foreign Investment Law. By the end of 1967, 23 projects with the backing of foreign capital was approved; comprising of 14 direct investments, 8 joint ventures, and 1 working contracts. [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Bab-03-P-J-1973%20cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Bab III: Penanaman Modal
publisher = Bappenas
date = 12th March 1967
accessdate = 2007-11-26
] Another investment law, this time directed towards domestic investors, was also in the process of being formulated.

Starting from February 1967, the Government began receiving aid from a group of donor nations and or organizations called the Inter Governmental Group on Indonesia (IGGI). IGGI consisted of Australia, Belgium, Britain, Canada, France, Japan, New Zealand, Switzerland, the United States, Asian Development Bank (ADB), the International Monetary Fund (IMF), the United Nations Development Program, and the World Bank. In 1967, the Government received $675.4 million in aid; comprising credit, food aid, infrastructural aid, and technical aid. [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Bab-04-P-J-1973%20cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Bab IV: Neraca Pembayaran dan Perdagangan Luar Negeri
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-26
] With regards to the Communist Bloc, the nations from which Sukarno had already borrowed heavily during his Presidency, Suharto wanted Indonesia to settle all of its debts plus interest although debts would still be rescheduled. Starting from mid September to early October 1967, protocols on debt rescheduling were agreed upon and signed between Indonesia and the Governments of East Germany, Czechoslovakia, and Hungary. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/keppres/kp196806.htm
title = KEPPRES 6/1968, Mengesahkan "Persetujuan Antara Pemerintah Republik Indonesia dan Pemerintah Republik Demokrasi Jerman Tentang Penyelesaian Kewajiban-Kewajiban Pembayaran dan Bunga Oleh Indonesia Kepada Kreditur-Kreditur Republik Demokrasi Jerman"
publisher = UN Mission in Timor
date = 16th January 1968
accessdate = 2007-11-27
] [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/keppres/kp196808.htm
title = KEPPRES 8/1968, MENGESAHKAN "PERSETUJUAN ANTARA REPUBLIK INDONESIA DAN REPUBLIK SOSIALIS CEKOSLOWAKIA TENTANG PEMBAYARAN-PEMBAYARAN KEWAJIBAN-KEWAJIBAN INDONESIA BESERTA PROTOKOLNYA"
publisher = UN Mission in Timor
date = 16th January 1968
accessdate = 2007-11-27
] [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/keppres/kp196807.htm
title = KEPPRES 7/1968, MENGESAHKAN "PROTOKOL TENTANG PERSETUJUAN MENGENAI PERSOALAN-PERSOALAN KEUANGAN YANG BELUM TERSELESAIKAN ANTARA PEMERINTAH REPUBLIK INDONESIA DENGAN PEMERINTAH REPUBLIK RAKYAT HONGARIA"
publisher = UN Mission in Timor
date = 16th January 1968
accessdate = 2007-11-27
] In November 1967 it was the Soviet Union’s turn to sign a similar protocol with Indonesia. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/keppres/k1968104.htm
title = KEPPRES 104/1968, MENGESAHKAN PROTOKOL MENGENAI HAL-HAL JANG BERTALIAN DENGAN KEWADJIBAN PEMBAJARAN KEMBALI KREDIT-KREDIT OLEH REPUBLIK INDONESIA KEPADA UNI REPUBLIK-REPUBLIK SOVJET SOSIALIS SERTA PULA PERIHAL BEBERAPA SOAL LAIN JANG BERTALIAN DENGAN HUBUNGAN EKONOMI ANTARA REPUBLIK INDONESIA DAN UNI REPUBLIK-REPUBLIK SOVJET SOSIALIS
publisher = UN Mission in Timor
date = 16th January 1968
accessdate = 2007-11-27
]

Infrastructure

In July 1967, the Government completed the Jatiluhur Dam in West Java. The Government saw the dam as a multipurpose infrastructure; expecting it to supply water to Jakarta and West Java, generate electricity, stop floods at Citarum, increase fishing production, and as a place for tourists to recreate. [cite news
author = Department of Public Works (PU)
url = http://www.pu.go.id/Ditjen_SDA/ditjen_desa/warta/Nov%20Des/waduk_jatiluhur.htm
title = Waduk Jatiluhur Sebuah Karya Luhur
publisher = Departemen Pekerjaan Umum
accessdate = 2007-11-27
]

tate Owned Enterprises

Throughout the course of the Acting Presidency, the Suharto Government did some work with regards to State-Owned enterprises. The Government established new State Owned Enterprises in the fields of the textile industry and urban planning. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196706.htm
title = PP 6/1967, PENDIRIAN PERUSAHAAN NEGARA INDUSTRI SANDANG
publisher = UN Mission in Timor
date = 24th July 1967
accessdate = 2007-11-27
] [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196707.htm
title = PP 7/1967 PEMBUBARAN BADAN PIMPINAN UMUM PERUSAHAAN BANGUNAN NEGARA, (SEBAGAIMANA TERMAKSUD DALAM P.P. NO. 55 TAHUN 1961, L.N. TAHUN 1961, NO. 76) SERTA PENDIRIAN PERUSAHAAN BANGUNAN NEGARA "BUWANA KARYA"
publisher = UN Mission in Timor
date = 24th July 1967
accessdate = 2007-11-27
] Similar to parallel regulations regarding ABRI and the bureaucracy, the Government also issued regulations regarding pay and allowances regarding those who work in State Owned Enteprises [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196723.htm
title = PP 23/1967, KETENTUAN KETENTUAN POKOK PENGGAJIAN PEGAWAI PERUSAHAAN NEGARA
publisher = UN Mission in Timor
date = 30th December 1967
accessdate = 2007-11-27
]

Cooperatives

On 18th December 1967, the DPR passed the Basics of Cooperatives Law. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196712.htm
title = UU 12/1967, POKOK POKOK PERKOPERASIAN
publisher = UN Mission in Timor
date = 18th December 1967
accessdate = 2007-11-27
] Although the previous Government already had its own Cooperatives Law which was passed in 1965, the Suharto Government viewed it as a law that politicized cooperatives. By requirement of the Sukarno-era legislation, a cooperative had to represent nationalist, religious, and communist elements in the adoption of Sukarno’s Nationalism, Religion, and Communism (Nasakom) concept and cooperatives was required to view itself as an equipment of the revolution. The new law placed cooperatives back as a purely economic institution and to undo the previous cooperatives law, does not approve of discrimination based on political beliefs amongst its leadership. The new law also called for the Government to guide, assist, supervise and protect cooperatives in its policies. This in effect, gives the Government authority over cooperatives although considerable autonomy was still given to the cooperatives.

ocial Issues

Health

As Acting President, Suharto had already begun to take steps to show that he wanted to adopt family planning as Government policy on a national scale. [The policy having originally being adopted by Governor Ali Sadikin ] In 1967, he signed the UN Declaration on Population and had already taken steps to implement family planning. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 173 ] By the end of 1967, 6,456 people had participated in the family planning program (KB) with the infrastructural backing of 116 KB clinics. [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Bab-12-P-J-1973cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Bab XII: Keluarga Berencana
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-27
]

ocial Security

The Ministry of Manpower experimented with a social security system in 1967. Through a Ministerial Regulation, a Social Security Fund was established by the Department of Manpower. [cite news
author = Bappenas
url = http://www.bappenas.go.id/index.php?module=Filemanager&func=download&pathext=ContentExpress/&view=418/Bab-12-P-J-1973cek.doc.
title = Lampiran Pidato Pertanggungjawaban Presiden 1968 s.d. 1973 Bab X: Tenaga Kerja
publisher = Bappenas
date = 1973-03-12
accessdate = 2007-11-27
] Under this fund, all costs for illnesses, pregnancy, giving birth, and deaths were covered by the Ministry. Only employees of private enterprises are eligible for this entitlement and it was not compulsory.

Veterans Affair

On 7th August 1967, the DPR passed the Veterans of the Republic of Indonesia Law. The law outlines not only the criteria for being a veteran but also their privileges; including receiving preference should a veteran apply to be a civil servant, being allowed to go back to their old jobs after they finished their service, and to receive skills education from the Government before they return to full civilian life. The law also called on the Government to ensure the veterans’ social security through grants. Provisions were also made in the law for the formation of a Republic of Indonesia Veterans’ Legion. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/uu/Uu196707.htm
title = UU 7/1967, VETERAN REPUBLIK INDONESIA
publisher = UN Mission in Timor
date = 7th August 1967
accessdate = 2007-11-27
]

Religion

In religious affairs, Suharto adopted a stance of supporting religious tolerance and was against forced religious conversion. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 162 ] As will be seen however, this tolerance does not extend to Confucianism.

Chinese Indonesian

By the end of the Acting Presidency, the Suharto Government had taken measures to suppress the cultural life of its Chinese Indonesian citizens. The policies that were adopted include the non-recognition of Confucianism as a religion, banning Chinese holidays such as the Chinese New Year, banning Chinese newspapers, banning Chinese schools, and banning the usage and teaching of Mandarin. [cite news
url = http://www.indomedia.com/bernas/2009/08/UTAMA/08uta2.htm
title = Kebudayaan Cina di Era Reformasi (1) Barongsai Mulai Jadi Primadona
publisher = Indomedia.com
date = 2000
accessdate = 2007-11-27
]

Information and Telecommunication

In accordance with the Basic Points of the Press Law, which was passed in late 1966, the Government formed the Press Council in July 1967. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196705.htm
title = PP 5/1967, DEWAN PERS
publisher = UN Mission in Timor
date = 8th July 1967
accessdate = 2007-11-28
] The Press Council was an institution designed to assist the Government in developing and fostering the Indonesian media. The Press Council was to be chaired by the Minister of Information.

Towards the end of 1967, the Government also moved to regulate amateur radio broadcasting. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196721.htm
title = PP 21/1967, RADIO AMATIRISME DI INDONESIA
publisher = UN Mission in Timor
date = 30th December 1967
accessdate = 2007-11-28
] Although the Telecommunication Law of 1964 had promised punishment to anyone who was illegally owning radio transmitters, amateur radio stations had begun forming after G30S as a form of political dissent against the then Sukarno Government and had become quite popular as a hobby. The Government regulated that amateur radio stations would be allowed to continue provided that the broadcasters get a permit from the Government before broadcasting and that they join an amateur radio organization.

Bureaucracy

As Acting President, Suharto began taking steps to reform the bureaucracy by forming a taskforce called the Team Assisting the President for the Ordering of Government Apparatus and Administration. [cite news
url = http://www.menpan.go.id/tentang_kami.asp
title = Sejarah Singkat
publisher = Kementerian Pendayagunaan Aparatur Negara
accessdate = 2007-11-28
] In December 1967, the Government executed two policies with regards to the bureaucracy. The first one was a regulation parallel to the ones that he made with regards to the pay, pay rise, and allowances to ABRI Soldiers and State Owned Enterprises Employees. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196712.htm
title = PP 12/1967, PERATURAN GAJI PEGAWAI NEGERI SIPIL REPUBLIK INDONESIA TAHUN 1968 (P.G.P.S. 1968)
publisher = UN Mission in Timor
date = 28th December 1967
accessdate = 2007-11-28
] The second one was an announcement that the Government was raising the pensions of retired civil servants as well as allowances for the widows and children of retired civil servants. [cite news
author = Suharto
url = http://www.unmit.org/legal/IndonesianLaw/pp/Pp196718.htm
title = PP 18/1967, PERBAIKAN PENGHASILAN PENSIUN PEGAWAI NEGERI SIPIL
publisher = UN Mission in Timor
date = 28th December 1967
accessdate = 2007-11-28
]

Election to the Presidency

The failure to hold a Legislative Election by 5th July 1968 meant that a new People's Consultative Assembly (MPR) would not be able to form which also meant that a new President and Vice President could not be elected through an MPR General Session. For Suharto, this meant that the length of his term as Acting President was in doubt. Wishing to solidify his position, Suharto used the DPR to lobby the MPRS to hold a General Session. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 165 ] The MPRS Leadership agreed and scheduled a General Session to be held in late March. The General Session was opened on 21st March 1968 and the first matter that it turned to was the Legislative Election. The MPRS quickly passed a resolution, setting 5th July 1971 as the new deadline for the Legislative Election.

When the MPRS turned its attention to the Presidency, Suharto faced an obstacle in the form of MPRS Chairman General Abdul Haris Nasution. Nasution was of the opinion that Suharto should deliver an accountability speech before going on to run for President. [cite news
last = Pour
first = Julius
url = http://www.kompas.com/kompas-cetak/0603/11/utama/2500391.htm
title = M Jusuf, Supersemar, dan Naiknya Soeharto
publisher = Kompas
date = 2006-03-11
accessdate =2007-11-29
] This notion did not gain momentum and Nasution was forced to let the matter go. On 27th March 1968, Suharto was officially elected to a full five year term; in the process officially becoming President of Indonesia. [cite book |last= Elson |first= Robert |title= Suharto: A Political Biography |origyear= 2001 |pages= p. 165 ]

Notes


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