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International Journal of Indonesian Studies Autumn 2015
A large number of PNI seats in the parliament and the addition of Ali Sastroamidjojo ’ s achievement at the Bandung Conference had made the PNI dominant and in a position to execute its economic-political policies . Moreover , because of the Bandung Conference , Indonesia ’ s bargaining position had increased and it could more effectively negotiate the problems in West Irian and press the Dutch . Campaigns by Ir . Soekarno and PNI in relation to national economic policies were aimed at transforming what remained of the economic structures of the Dutch colonial system . Ricklefs ( 2001 ) argued that the cabinet also pressed for Indonesianisation of the economy , with encouragement for indigenous businessmen . In practice , however , many new firms were bogus fronts for arrangements between government supporters and the Chinese : the so-called ‘ Ali-Baba ’ firms , in which an Indonesian (‘ Ali ’) was a front man for a Chinese (‘ Baba ’) entrepreneur . 5
The resignation of Muhammad Hatta in 1956 and the unfinished constitution ’ s formulation by the Konstituante , which had lasted from November 10 th 1956 until 1958 , led to the creation of the Guided Democracy which placed total power in Ir . Soekarno ’ s hands . In late 1956 , President Sukarno became openly critical of the parliamentary system . In February 1957 , Sukarno offered an extremely vague alternative with his Konsepsi speech , which proposed a gotong-royong cabinet ( gotong royong meaning mutual help ) comprised of all the political parties , plus a national council composed of representatives of functional groups ( such as workers ’ groups , women ’ s groups ) that would advise the cabinet ( Feith , 1962 ; Redfen , 2010 , 34 ).
The break up of Dwi Tunggal and chaos in the parliament was the beginning of the transition to Guided Democracy through the Presidential Decree on July 5 th 1959 which contained the dismissal of the Konsituante and the formation of the Advisory Board ( Dewan Perwakilan Agung Sementara / DPAS-Majelis Permusyawaratan Rakyat Sementara / MPRS ), and a return to the Undang-Undang Dasar-UUD 1945 as Indonesia ’ s basic constitution . The parliamentary condition that saw a polarisation of Nationalist / Secular groups and Islamic parties was taken advantage of by Communist groups / PKI as the 4 th position holder in the DPR . The international situation and the Bandung Conference , in particular the PRC ’ s / Chou En Lai ’ s attendance at that event , had increased the prestige of the PKI . In addition , the peaceful-coexistence policy which was being promoted internationally by the CPSU / Communist Party of Soviet Union or Soviet Union , indirectly , offered a form of support to the Afro-Asian movement and encouraged closer ties between a number of emerging states , some newly independent , with the Eastern Bloc . 6
5 See ( Dick et . al ., 2002 , 78 ). The Emergence Of A National Economy . An economic history of Indonesia , 1800 –
2000 , Asian Studies Association of Australia in association with Allen & Unwin and University Of Hawai ’ i Press Honolulu . The program was extended to nationalisation of 70 % of the import trade . Nominally this goal was achieved , but in early 1955 the head of the Central Office of Imports estimated that there were only 50 bonafide importers ( Sutter , 1959 , 1025 – 1026 ). 6 Khrushchev noted the development of a new force for peace in world politics : the neutral and non-aligned
movement of newly independent countries which had recently thrown off the shackles of colonialism in Asia and Africa . Nevertheless , PRC viewed de-Stalinisation and rejected Stalin ’ s foreign policies and his cult òf