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Report: U.S. Arms Transfers to Indonesia 1975-1997 - World Policy Institute - Research Project

ARMS TRADE RESOURCE CENTER

REPORTS - Weapons at War
March 1997

For further information:
William D. Hartung,
212-229-5808, ext. 106
or Frida Berrigan,
212-229-5808, ext. 112

U.S. Arms Transfers to Indonesia 1975-1997: Who's Influencing Whom?
by William D. Hartung

Acknowledgments
This special report is part of an ongoing series of reports on the costs and consequences of the conventional arms trade carried out by the Arms Trade Resource Center, a project of the World Policy Institute at the New School for Social Research. This report was written by Institute Senior Fellow William D. Hartung and Institute Research Associate Jennifer Washburn. The Center would like to thank Martin Broek of STOP Arming Indonesia, Amsterdam, Netherlands, for providing extensive source materials for the appendix on U.S. arms deliveries to Indonesia.

The World Policy Institute would also like to thank the following foundations whose support made this report possible: the Compton Foundation, the S.H. Cowell Foundation, the HKH Foundation, the Ruth Mott Fund, the Ploughshares Fund, Rockefeller Family Associates, and the Spanel Foundation.

Table of Contents
Introduction
In the Beginning
How Important Are U.S. Arms To Indonesia?
The Pending F-16 Sale
Financing and Offsets
Notes
Appendix

Introduction: The Issue of Arms to Indonesia Heats Up
The events of the past year have cast a harsh spotlight on the longstanding U.S. government policy of providing weapons and military training to Indonesia. The awarding of the 1996 Nobel Peace Prize to Bishop Carlos Ximenes Belo and José Ramos-Horta, activists in the struggle to reverse Indonesia's brutal occupation of East Timor, has reinforced international concerns about the legitimacy of continuing U.S. arms sales to the Suharto regime. Congressional investigators have been probing the role of contributions from the Indonesian-based Lippo group in the 1996 presidential campaign, and upcoming public hearings will address the question of how these foreign donations may have influenced U.S. policy toward Indonesia.

In the meantime, the human rights situation on the ground in Indonesia appears to be getting worse. In June of 1996, the Suharto regime engineered the ouster of Megawati Soekarnoputri as head of the opposition Partai Demokrasi Indonesia (PDI), sparking what Human Rights Watch has described as "the most serious riot in Jakarta in two decades."[1] The government then arrested Muchtar Pakpahan, the head of Indonesia's largest independent labor union, on specious charges of inciting the riots. Pakhapan and a dozen other labor and student leaders are now being tried on charges of subversion that could result in long prison sentences or even the death penalty for the "crime" of criticizing the Suharto regime.[2]

In the midst of these developments, the Clinton Administration is planning to sell at least 9 F-16 fighter aircraft to Indonesia, the first U.S. sale of major combat aircraft to Jakarta in over a decade. The total F-16 package, including upgrades, spare parts, and support equipment, will be worth roughly $200 million. The deal has been postponed several times, first in response to the crackdown on dissent in Indonesia that began in the summer of 1996 and then because of the embarrassing political timing involved in proceeding with it in the midst of Senate hearings on the role of Indonesian funding sources in the 1996 presidential campaign. But as of this writing the administration remains committed to the Indonesian F-16 sale, and is expected to move on it some time later this year. At a news conference held just after the election on November 8, 1996, President Clinton adamantly denied that his policy towards Indonesia had been in any way influenced by the soft money contributions of the Lippo group to the Democratic National Committee:

"[T]he answer to that is absolutely not. Indeed, look at the difference in my policy and my predecessor's policy. We changed our policy on arms sales because of East Timor, not to sell small arms. And we cosponsored a resolution in the United Nations in favor of greater human rights in East Timor. And I'm proud that we did that. So I can tell you categorically that there was no influence."[3]

In a counterpoint to President Clinton's rosy view of U.S. arms sales policy towards Indonesia, Nobel Peace Laureate and East Timor independence activist José Ramos-Horta has sharply criticized the administration's plan to sell F-16s to the Suharto regime, arguing that "it's like selling weapons to Saddam Hussein." Ramos-Horta has had painful personal experience of the impact of U.S. arms sales to Indonesia, as he set out in detail in an October 1996 article in the International Herald Tribune:

"In the summer of 1978, with East Timorese guerillas continuing to resist the Indonesian military occupation, the war struck my family. My sister Maria Ortensia was killed by a U.S.-made Bronco aircraft that was being used by Indonesian forces in East Timor for counterinsurgency operations. The same year I lost two brothers, Nunu and Guilherme, the first killed by fire from a U.S.-designed M-16 automatic assault rifle made under license in Indonesia, and the second during a rocket and strafing attack by a U.S.-supplied helicopter on an East Timorese village."[4]

While the Clinton Administration should be commended for imposing a ban on the sale of small arms to Indonesia, the proposed F-16 deal and continued supplies of spare parts for Indonesia's impressive accumulation of U.S.-origin weaponry can only serve to undermine ongoing efforts to pressure the Suharto regime to loosen its grip on East Timor and increase its respect for human rights within Indonesia. Significantly, the President has waffled in response to requests from concerned members of Congress such as Sen. Russ Feingold and East Timorese leaders such as José Ramos Horta to support a United Nations administered referendum in which residents of East Timor could choose for themselves independence or continued affiliation with Indonesia. When Feingold and 27 other Senators sent a letter to President Clinton in late October of 1996 encouraging him to raise the issue of self-determination for East Timor in an upcoming meeting with President Suharto, White House spokesperson Mike McCurry reported only that "President Clinton also raised continuing American concerns about the human rights situation in Indonesia, particularly East Timor."[5]

So, while the Clinton Administration has taken some initiatives towards Indonesia that set it apart from its predecessors, concerns about human rights and democracy are not at the forefront of U.S. interactions with Jakarta. To get a sense of how the Clinton policy measures up, it is important to put the U.S.-Indonesian relationship and the proposed F-16 sale in historical perspective.

The United States government has aided and abetted the Suharto regime's illegal annexation of East Timor from the moment of Indonesia's 1975 invasion up through the present. Beyond turning a blind eye to Indonesian repression in East Timor, the most tangible expression of U.S. support for the Suharto regime has been a massive, steady supply of U.S. armaments to the Indonesian military. The following accounting of U.S. weapons shipments to Indonesia over the past two decades is based on official U.S. government data and standard non-governmental sources (see source list, below).

In all, the United States has sold more than $1.1 billion in weaponry to Indonesia since its 1975 invasion of East Timor; the sales have gone on in Republican and Democratic administrations alike, regardless of the rhetoric espoused by those Presidents at the time (see Table I, below). For details on the numbers and types of U.S. weaponry supplied to Indonesia, see Appendix and Chart I (pp. 18-31, below).

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In the Beginning: Kissinger's Green Light, Stepped Up Weapons Shipments
State Department cable traffic and other contemporaneous accounts have documented the fact that two days prior to Indonesia's 1975 invasion of East Timor, President Gerald Ford and Secretary of State Henry Kissinger gave the green light for Indonesia's invasion of East Timor while attending a state dinner with President Suharto in Jakarta that was held in their honor. During that visit, the US representatives also pledged a substantial increase in US military aid to Indonesia for the following year. Not so coincidentally, U.S. arms sales to Indonesia more than quadrupled from 1974 to 1975 from $12 million to more than $65 million, while U.S. military aid to Jakarta more than doubled from 1974 to 1976, from $17 million to $40 milllion.[6] In 1977, Congressional hearings before the House International Relations Committee confirmed that several major US weapons systems sold to Jakarta during this period -- including 16 Rockwell OV-10 "Bronco" counterinsurgency aircraft, 3 Lockheed C-130 transport aircraft and 36 Cadillac-Gage V-150 "Commando" armored cars -- were used directly in East Timor. Other US weapons linked to East Timor's illegal occupation, and referenced during the hearing, include: S-61 helicopters, patrol craft, M-16 rifles, pistols, mortars, machine guns, recoiless rifles, ammunition, and extensive communications equipment.

Although U.S. arms sales leveled off at $10 to $12 million per year for the last two years of the Ford Administration, a pattern of U.S. military support for the Suharto regime, whenever needed, was firmly established.

From Carter to Clinton: A Steady Traffic in Arms to Jakarta
Unfortunately, despite its professions of support for human rights in Indonesia, the Carter Administration picked up where Kissinger and Ford had left off. As Noam Chomsky writes in the preface to Matthew Jardine's 1995 book, East Timor: Genocide in Paradise, "In 1977, Indonesia found itself short of weapons, an indication of the scale of its attack. The Carter administration accelerated the arms flow."[7] U.S. arms sales hit $112 million in 1978, and averaged nearly $60 million per year for the four years of the Carter administration -- this was more than twice the level of weaponry supplied to the Suharto regime by the Ford Administration. During a visit to Jakarta in May, 1978, Vice President Walter Mondale offered to sell Indonesia 16 A-4 "Skyhawk" attack planes, a principle counterinsurgency aircraft that was used by US forces in Vietnam and is capable of spraying weapons fire and explosives over wide areas. Delivery of the "Skyhawk" attack planes as well as a brand new batch of 16 Bell UH-1H "Huey" helicopters proved essential to Suharto's rearmament effort.

The Reagan administration maintained a steady weapons flow to Jakarta, averaging over $40 million per year in arms sales during its first four years in office. In 1986, however, it approved a record $300 million plus in weapons sales to Jakarta. This was the same year that the US sold Indonesia its first batch of 12 F-16 fighter planes. (A new, pending sale of F-16s is currently in the works, see below).

Sales to Indonesia dropped slightly during the Bush years, to roughly $28 million per year. When Bill Clinton first took office, it appeared that conditions were ripe for a drop in U.S. sales to the Jakarta regime: members of Congress were moving to block U.S. training funds to the Indonesian military on human rights grounds, and the State Department --attempting to head off Congressional and human rights opponents of arms sales to Indonesia -- agreed to a voluntary ban on small arms sales to Jakarta. Recently, the State Department expanded the ban to include helicopter-mounted armaments (1995) and armored personnel carriers (1996). Unfortunately, despite these concessions, if the proposed sale of 9 to 11 F-16s goes ahead as planned, the Clinton Administration will have approved roughly $270 million in arms sales to Indonesia in just over 4 years, or an average of over $67 millilon per year. This represents more than twice the level of arms sales to Indonesia concluded during the Bush Administration, and allowing for inflation, it represents the highest level of U.S. sales since the second Reagan term or the early Carter period. In short, unless the Clinton administration changes course and stops its proposed sale of F-16s to Jakarta, it will rank right up there with the top weapons traffickers to Indonesia of any administration that has been in office since the 1975 invasion of East Timor.

Table I (p. 7, below) presents data on trends in U.S. arms supplies to Indonesia from 1975 to 1995.

Table I:U.S. Arms Transfers to Indonesia, 1975-1995 (in millions of current dollars)
Year FMS Commercial MAP/Excess Total
1975 $51.6 $0.3 $13.1 $65.0
1976 3.7 6.7 26.9 37.3
1977 7.6 5.3 14.1 27.0
1978 109.6 3.0 14.4 127.0
1979 37.9 17.0 1.9 56.8
1980 14.6 6.2 5.4 26.2
1981 45.1 6.6 .9 52.6
1982 52.8 .1 1.9 54.8
1983 32.2 7.8 --- 40.0
1984 9.6 16.6 --- 26.2
1985 19.7 29.3 --- 49.0
1986 295.5 16.0 --- 311.5
1987 3.5 21.5 --- 25.0
1988 5.1 6.9 --- 12.0
1989 1.9 32.1 --- 34.0
1990 18.9 33.1 --- 52.0
1991 27.8 6.7 --- 34.5
1992 10.7 18.1 --- 28.8
1993 30.8 4.0 --- 34.8
1994 11.1 .8 --- 11.9
1995 11.3 1.2 --- 12.5*
Total $801.0 $239.3 $78.6 $1,118.9 million
Table I Sources: Data on orders under the Pentagon's Foreign Military Sales (FMS) program, the Commercial arms sales program, and the Military Assistance Program and Excess Defense Articles (MAP/Excess) are drawn from U.S. Department of Defense, Defense Security Assistance Agency, Fiscal Year Series as of September 1981 and Foreign Military Sales, Foreign Military Construction Sales, and Military Assistance Facts (annual, various years, 1982 through 1996).
*Note: Clinton Administration figures on arms sales to Indonesia could jump dramatically if a pending $200 million sale of F-16 fighter aircraft is completed later this year.

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How Important Are U.S. Arms To Indonesia?
During the 1977 House International Relations Committee hearing, George H. Aldrich, the State Department's Deputy Legal Advisor, testified that "roughly 90%" of Indonesia's weapons during the time of the 1975 invasion of East Timor came from the United States. As one high-ranking Indonesian general bluntly pointed out, "Of course there were US weapons used [during the attack on East Timor]. These are the only weapons that we have."[8]

During Indonesia's prolonged battle to occupy the island of East Timor, US-supplied counterinsurgency aircraft also proved essential. Certainly one of the deadliest weapons in Indonesia's arsenal was the US-supplied OV-10 Bronco, especially designed for close-combat, which is equipped with infared detectors, and can carry up to 3600 pounds of ordnance, grenade launchers, rockets, napalm, and machine guns. [9] In the late 1970s, Indonesia used OV-10 Broncos and other US-supplied equipment to carry out extensive and continuous bombing missions in the interior highlands, eradicating crops and forcing 300,000 East Timorese to flee to the Indonesian-controlled lowlands. From there, refugees were herded into concentration camps, where thousands died of starvation and disease.

Although Jakarta has diversified its weapons sources since that time, turning to Britain, France, Germany and others to round out its arsenal, U.S. supplies remain essential. According to the U.S. Arms Control and Disarmament Agency, from 1992 to 1994 (the most recent years for which full data is available), Indonesia received 53% of its weapons imports from the United States.

Since the mid-1980s, Indonesia has relied almost entirely on the United States and its Western European allies (particularly the United Kingdom, France, and Germany) for its imported armaments, obtaining anywhere from 91 to 100% of its imported weapons from U.S. or Western European sources over this time period. Major deals with European powers have included imports of 20 105mm howitzers from France, several squadrons of Hawk fighter jets from the United Kingdom, and dozens of combat ships from Germany (equipment that belonged to the former East German navy).[10] This concentration of imports from the U.S. and its key European allies suggest that a coordinated policy among these nations to limit arms to Indonesia in exchange for improvements in human rights and withdrawal of Indonesian forces from East Timor could have a considerable impact in shaping Indonesian policy. With a handful of close allies supplying most of Indonesia's weaponry, the old argument that "if we don't sell it, somebody else will" rings particularly hollow.

Table II provides data on the major sources of arms to Indonesia from 1978 through 1994, based on data from the U.S. Arms Control and Disarmament Agency (see p. 10, below).

Because Indonesia has accumulated so much U.S. weaponry in the past two decades, there is also a brisk trade in spare parts and upgrades for U.S. systems that are already in Jakarta's arsenal. According to data supplied by the State Department's Office of Defense Trade Controls (ODTC), in Fiscal Year 1994 U.S. companies received 198 licenses for the export of $88.3 million worth of weapons and weapons components to Indonesia; in F.Y. 1995, the Department granted 248 licenses for items worth more than $221 million. The majority of these licenses will not result in final sales; historically only about one-sixth to one-third of the value of licenses granted to a given country result in actual sales. Nevertheless, even if $50 to $100 million of the $309 million in licenses approved during 1994 and 1995 result in transfers of arms and arms technology to Indonesia, that will represent a significant boost to the Indonesian military. Among the items licensed are millions of dollars in spare parts for Indonesia's U.S.-origin A-4, F-5, F-16, and C-130 aircraft; spare parts for armored combat vehicles and Sidewinder missiles; and small licenses for spare night vision scopes for U.S. made rifles, pistols and revolvers, and ammunition manufacturing.[11]

Table II: Major Arms Suppliers to Indonesia
1978-1994
Years Total Arms Imports Top Suppliers (by %)
1992-1994 $170 million U.S. 53%
Germany 47%
Total, Top 2: 100%
1991-1993 $210 million France 47%
U.S. 33%
Germany 19%
Total, Top 3: 99%
1987-1991 $950 million U.S. 37%
France 14%
Other Western European 45%
Total from U.S./Western Europe: 96%
1985-1989 $770 million U.S. 26%
United Kingdom 10%
Other Western European 55%
Total from U.S./Western Europe: 91%
1984-1988 $715 million U.S. 29%
United Kingdom 15%
Total, Top 2: 44%
1982-1986 $750 million U.S. 25%
U.K. 13%
France 13%
Total, Top 3: 51%
1979-1983 $1,360 million U.S. 20%
France 15%
U.K. 7%
Total, Top 3: 42%
1978-1982 $1,300 million U.S. 19%
Germany 11%
France 9%
Total, Top 3: 39%
Source: United States Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers, editions covering, 1993-94, 1991-92, 1990, 1989, 1987, 1985, and 1972-82. Corporate Culprits

Among the U.S. corporations that are profiting from arms sales to Indonesia are Lockheed Martin (maker of the F-16 and the C-130 transport, both of which have been shipped to Indonesia); Textron (whose Cadillac Gage and Bell Helicopter divisions have supplied armored vehicles and military helicopters to the Jakarta regime); Colt Industries (which has sold thousands of M-16 rifles to the Indonesian armed forces); and General Motors/Hughes (which has sold 500MD helicopters to Jakarta as well as air-to-air missiles).

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The Pending F-16 Sale
A pending sale of F-16s to Indonesia was postponed in mid-1996 due to a new wave of repression by the Suharto regime against the Indonesian pro-democracy movement. Allegations of improper influence involving Indonesian contributions to the Democratic Party have resulted in further delays in the timing of the sale, but the Clinton administration appears to be committed to moving forward on the deal some time later this year. The F-16s being offered are leftover from a deal with Pakistan that was interrupted due to sanctions on that nation for its nuclear weapons program. Funds from the Indonesia sale will be used to partially reimburse Pakistan for the cost of the 28 planes it purchased but never received. Lockheed Martin may only stand to make a few million dollars doing "upgrades" on the planes, but their real interest is in opening the door for additional F-16 sales to Indonesia and other parts of Asia. Indonesia has already expressed a strong interest in purchasing the latest-model F-16 fighter planes in the next go around.

Current plans call for the Clinton Administration to formally notify Congress about the Indonesian F-16 sale some time later this year, probably at some decent interval after the Senate hearings on the financing of the 1996 presidential elections have been concluded. The sale will face strong opposition. Prominent Senators such as Patrick Leahy (D-VT) have already written to the President to express their opposition to the deal, and key House members ranging from Speaker Newt Gingrich (R-GA) and House International Relations Committee Chairman Ben Gilman (R-NY) have also weighed in against it. In a November 10, 1996 letter to the Washington Post, Rep. Gilman revealed that he had informed Clinton Administration representatives in the summer of 1996 that if they went forward with the proposed F-16 sale in the face of the Suharto regime's crackdown on opposition political leaders that he would "introduce a resolution of disapproval and convene an early meeting of our full committee for the purpose of reporting my resolution to the full house." Gilman further noted that in the light of the revelations regarding the Lippo Group and Indonesian money in the 1996 elections, "I have requested the Secretary of State to withhold action on this proposal until the many questions now raised by the Lippo Group investigation can be resolved." Major non-governmental organizations that have already taken a stand against the sale include the National Council of Churches, Human Rights Watch, the Federation of American Scientists, Peace Action (the largest grassroots peace organization in the United States), and the East Timor Action Network. Possible Congressional actions could range from resolutions of disapproval blocking the deal outright to amendments conditioning the sale of any further weaponry to Indonesia on the improvement of human rights and democratic process in Indonesia and East Timor.

The Clinton Administration's various rationales for going ahead with the sale are contradictory at best. In the context of defending himself against charges of influence peddling in the matter of Indonesian contributions to his campaign, President Clinton has made a point of arguing that he has been harder on Indonesia than the Bush Administration was, citing a ban that the State Department has imposed on the sale of small arms from the U.S. to Indonesia as evidence of his tough stand. Selling F-16 fighters, but not handguns or rifles, sends the Suharto regime a mixed message at best regarding the consequences of its ongoing record of repression and human rights abuses. At an October 11 briefing, White House spokesperson Mike McCurry tried to carve out an exception for the F-16 sale, asserting that "our goal in arms transfers in that region is to promote stability . . . not to engage in anything resembling the repression of individual rights . . . You don't use F-16s to kill civilians in crackdowns on dissidents." During Congressional testimony in September, Assistant Defense Secretary Kurt Campbell sounded the "stability, not repression" theme as well when he argued for the Indonesian F-16 sale on the grounds that "a regionally respected armed forces with credible defensive capabilities that trains and operates in a non-threatening manner is an important contributor to regional stability."[12]

All of these arguments overlook the fact that the Indonesian military has been the instrument for Jakarta's illegal occupation of East Timor, during which time over 200,000 people have been killed. Selling advanced weaponry to the Suharto regime at the very moment that it is engaged in a crackdown on dissent within Indonesia and an acceleration of repression in East Timor sends exactly the wrong message: that whatever abuses it may engage in, and whatever slaps on the wrist it may receive from the Clinton Administration as a result, when push comes to shove the U.S. will support the Suharto regime and its military apparatus regardless of its brutal, lawless behavior. Furthermore, while F-16s may not be used directly to put down street demonstration or torture human rights activists, the Indonesian military's ability to sustain its illegal hold over East Timor ultimately rests on all of the weaponry it has at its disposal (including tanks and advanced combat aircraft like the F-16), not just the items used in day-to-day repression.

Financing and Offsets: Who Will Pick Up the Tab?

Indonesia received its last major installment of military aid from the United States in 1991, when the U.S. supplied the Suharto regime with $25 million under the Pentagon's Foreign Military Financing (FMF) program. Since that time, however, Indonesia has become eligible for several new channels of arms export subsidies, one of which it has taken advantage of already and the other of which coule come into play as part of the pending F-16 sale. The first channel involves guaranteed loans offered by the U.S. government's Export-Import Bank which are granted for so-called "dual use" items: equipment with both military and civilian applications. Indonesia was one of the first countries to benefit from this new program, which was implemented after intensive lobbying by the Aerospace Industries Association. In late 1995 Indonesia received a $22 million loan guarantee from ExIm Bank to refurbish seven of that nation's U.S.-origin C-130 and L-100 transport aircraft. The second channel of assistance is the Pentagon's newly created $15 billion arms export loan guarantee fund: [13] Indonesia is one of 37 nations in Europe and Asia that is currently eligible to receive support from the fund. Indonesian officials have indicated an interest in receiving some kind of credit or subsidized financing for the F-16 sale. If so, Indonesia would receive very cushy financing: any missed payments on the roughly $200 million involved in the F-16 sale and the shortfall would be fully covered by U.S. taxpayers. [14]

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