THE FUTURE IN INDONESIA

1. PRESENT POSITION
Both Dutch and Republicans have accepted the United Nations
Commission's invitation to discussions in Batavia subject to
certain conditions. [1] The Republicans [will] only discuss
initial[ly] practical details concerning the restoration of the
Government to Djocjacarta. The Dutch who are to be led by Dr. van
Royen will attend the discussions on the understanding that they
will not prejudice the responsibility of the Dutch for 'freedom
and order' in Indonesia.

It should now be plain to both parties that they have much to gain
by reaching a political settlement and very little extra to lose.

2. DUTCH ATTITUDE
The Dutch fail to see why the rest of the world cannot understand
that they alone have responsibility for law and order in Indonesia
during the interim period. They blame the United Nations for their
troubles in Indonesia and do not see why they should be one of the
few to obey its dictates. Their stubbornness will now be
strengthened by their inclusion in the Atlantic Pact. They cannot
get away from the idea that they have ruled Indonesia beneficially
for three and a half cent[uri]es and probably have a genuine
belief in the inefficiency and corruption of the Republic.

3. REPUBLICAN ATTITUDE
The Republicans have no faith in Dutch promises and proposals and
have insisted on implementation of the 28th January Resolution.

[2] They would need more than Dutch assurances to reach a
political agreement although they have accepted the Federal idea
and the proposal for a Netherlands-Indonesian Union.

4. RESULTS OF BATAVIA DISCUSSIONS
Some agreement to get together on the future of Indonesia must
undoubtedly be reached at the Batavia discussions. Critchley
however, is not very optimistic and in his latest telegram (K294
[3]) states 'I have little confidence ... in the Dutch intentions
towards the Conference'.

The Security Council directive [4] of 23rd March was both a face
saver for the Dutch in that it accepted a counter proposal for a
Round Table Conference at The Hague, and a warning to the Republic
in that it was a watering down of the 28th January Resolution.

The Dutch must now realise that their aggression has not
liquidated the Republic but has strengthened it. The moral support
of the world, the activities of the Republican guerillas and the
sympathy of the B.F.O. for the Republicans must make the Dutch see
reason.

The Republican leaders must realise that if some agreement is not
soon reached they will fail to control their emergency Government
and the guerilla bands among whom splits have already developed.

5. FACTORS FORCING AGREEMENT
(a) Opinion of the World
Moral Condemnation of Dutch aggression has already been expressed
through the Security Council and the New Delhi Conference
Resolutions. [5] It is likely to be expressed on a larger scale in
the General Assembly. The Dutch are apprehensive that discussion
in the Assembly will add to the difficulties of agreement. Perhaps
this will make them get a move on towards settlement.

(b) Guerilla Warfare
Reports from Military observers and neutral observers as well as
Dutch and Indonesian sources show clearly that guerilla activity,
reprisals and terror have caused chaos in large parts of Java and
Sumatra. Colonel MacDonald who visited Canberra on 6th April
stated that Military observers believe that the Dutch have no hope
of cleaning out the guerillas. He claimed that before the second
Police Action it was safe to move anywhere in Republican Territory
but not in Dutch Territory; now it was unsafe to move anywhere.

Both sides probably realise now that guerilla warfare can become
chronic. Only a political settlement can prevent this.

(c) Fear of Indonesia becoming Second Burma
Chaos is on the 'rompok' in Indonesia. Unless there is soon some
central control through political agreement the country will be
divided between rival bands of T.N.I. Siliwangi Division, Darul
Islam Federalist troops, Tan Malakka bands, P.K.I. bands and plain
brigands.

(d) Attitude of B.F.O.

After accepting the Dutch invitation to attend the Hague Round
Table Conference at its face value, the B.F.O. changed its mind as
a result of discussions with the Republican Leaders at Bangka. On
3rd March it passed a resolution [6] calling for the restoration
of Republican leaders and Government to Djocjacarta. This was a
severe and unexpected blow to the Dutch who have made every
attempt to keep the resolution secret.

(e) Attitude of Republican Emergency Government
Critchley pointed out [7] on 15th March that there was already
some criticism of the Republican leaders at Bangka taking
decisions for which the Emergency Government was given power on
19th December. Since then Dr. Sjafrudin, Head of the Emergency
Government, has stated his belief that the Dutch intend to re-
impose Colonial status in the guise of a Federal Government and
United States of Indonesia. Unless Political Agreement is soon
reached there is bound to be a split in the Republican ranks.

(f) Economic Dislocation
In the areas occupied by the Dutch after the 1st and 2nd Police
actions guerilla activity is dislocating economic rehabilitation
which can only function on law and order the establishment of
which was ostensibly the reason for the Police actions. This is
nullifying whatever effect the nominal lifting of the Dutch
blockade may have had. Indonesia, potentially a prosperous
country, will be reduced to poverty unless a political settlement
is reached.

(g) Further Action by the New Delhi Powers
The Dutch are aware that if no solution is forthcoming the New
Delhi Powers may initiate a move for sanctions.

(h) United States Pressure on Dutch
This is perhaps the only way to make the Dutch see reason. In
Friday's press (Canberra Times) is the following 'The Senate
agreed to cut further United States aid to any nation singled out
for punishment by the United Nations for violation of its Charter.

The proposal, sponsored by Senator Brewster, arises from the
Indonesian dispute. He told the Senate that, unless the dispute
was settled, it would be a major hurdle to Senate approval of the
recently signed North Atlantic Pact, in which Holland was a
signatory. Senator Brewster said a number of Senators would demand
that the Netherlands settle the Indies trouble before the Senate
agreed to ratify the Atlantic Pact.'
6. POSSIBLE SOLUTIONS
(a) If the Dutch refuse to restore the Republicans to Djocjacarta
then the Republican Government will presumably maintain the fight
either from somewhere in Indonesia or in exile. Chaos will ensue
and Indonesia will be in the grip of terror and disruptive creeds.

The United Nations should in this event impose sanctions.

(b) If the Dutch agree to the restoration of the Republicans to
Djocjacarta the Indonesian problem will not be insoluble.

Australia might then suggest that:

(I) the Republicans (including the Emergency Government) and
B.F.O. should get together to arrive at a Political Agreement
among themselves. It would be hoped that they would then burn the
B.I.O. Decree [8];

(II) after such agreement the Dutch and Indonesians (Republicans
and B.F.O.) should agree to joint control of the Federal Army
during the interim period. This question of control has always
been a stumbling block, but if the Dutch really mean that they can
form the United States of Indonesia before 1st July, 1950, then
the interim period will not be very long. Indonesian and Dutch
troops could maintain de facto control in areas now occupied by
them until the Dutch troops are withdrawn and Indonesian troops
take over.