Asian Pacific Economic Cooperation (APEC)

Asian Pacific Economic Cooperation (APEC)

APEC is an organization that aims to promote free trade and economic cooperation throughout the Asia Pacific region. It was created in 1989 because of the growing interdependence of Asia-Pacific economies and the establishment of regional economic blocs such as the European Union and the North American Free Trade Agreement.

APEC intends to improve living standards and education levels through sustainable economic growth and to promote a sense of community and an appreciation of common values among Asia-Pacific countries. APEC’s membership includes 21 states, called “member economies.”

Of these, 12 are founding members—Australia, Brunei, Canada, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and the United States— while Chile, China, Hong Kong, Mexico, Papua New Guinea, Peru, Russia, Taiwan, and Vietnam joined at a later phase. APEC has no treaty obligations of its participants.


Decisions made within APEC are reached by consensus, and commitments are undertaken on a voluntary basis. APEC’s membership accounts for approximately 40 percent of the world’s population, approximately 56 percent of world GDP, and about 48 percent of world trade.

The first APEC Leaders’ Meeting occurred in 1993 and was organized by Bill Clinton in Blake Island, Washington. At its 1994 summit meeting in Bogor, Indonesia, APEC set an ambitious schedule to achieve free trade and raise the level of investments throughout the Asia-Pacific region by 2010 for members with developed economies and by 2020 for members with developing ones.

The Osaka Action Agenda was adopted a year later and was designed to implement APEC’s goals of liberalizing trade and investment, facilitating business activities, and promoting economic and technical cooperation. The procedure that all APEC’s decisions had to be taken by consensus and preferably passed unanimously limited the effectiveness of APEC.

In addition, although decisions can be taken in the absence of unanimity, they are not legally binding on member governments. In 1997 at the annual summit in Vancouver, Canada, police forces violently clashed with demonstrators objecting to the presence of Indonesian president Suharto.

APEC is organized into numerous committees, special task commissions, working groups, and a business advisory council. The committees meet twice per year. The working groups are led by experts and consider specific issues, including energy, tourism, fishing, transportation, and telecommunications.

Every year one of the member economies hosts an economic leaders’ meeting, selected ministerial meetings, senior officials meetings, the APEC Business Advisory Council and the APEC Study Centres Consortium, and also fills the executive director position at the APEC secretariat.

The deputy executive director changes every year, as the position is given to a senior diplomat of the country who will be the APEC chair the following year. The APEC secretariat, established in 1993 and based in Singapore, provides coordination as well as technical and advisory support for all the organization’s initiatives.

Association of Southeast Asian Nations (ASEAN)

ASEAN logo

The Association of Southeast Asian Nations (ASEAN)— with Indonesia, Malaysia, the Philippines, Singapore, and Thailand as original members—was established on August 8, 1967. As outlined in the Bangkok declaration of ASEAN, it was formed to strive for the peace and prosperity of the region.

An important regional organization, ASEAN, whose member countries have a population of more than 500 million, strove for regional cooperation to benefit its member countries. It encompassed the rest of the countries of Southeast Asia over time with the admission of Brunei (1984), Vietnam (1995), Laos and Myanmar (1997), and Cambodia (1999). The Meeting of the ASEAN Heads of State and Government is the top decision-making body of the ASEAN.

Every year, ASEAN Summit and ASEAN Ministerial meetings are held. The term of the secretary-general is five years, and he advises on and implements various ASEAN programs. The cooperation of member countries is through specialized bodies pertaining to education, energy, police, meteorology, and other areas.

Against the changing backdrop of the geopolitical situation, the ASEAN countries saw the necessity of regional cooperation on matters of common interest. The ASEAN was established during the Vietnam War, and the member countries were bound together by fear of North Vietnam and China.


The victory of communists in Indochina in the early 1970s and diminishing American involvement made the ASEAN states fearful of communism. The Kuala Lumpur declaration of November 22, 1971, called for the creation of a Zone of Peace, Freedom, and Neutrality (ZOPFAN) in Southeast Asia aimed at neutralization of the region.

The triumph of communism in the three Indochinese states of Laos, Cambodia, and Vietnam in 1975 spurred the ASEAN into action. Fearful of a militant and expanding communism, the ASEAN countries signed the Treaty of Amity and Cooperation at the First ASEAN Summit held at Bali, Indonesia, on February 24, 1976.

It called for renunciation of the use of force, cooperation among the nations in Southeast Asia, and noninterference in one another’s internal affairs. After the dissolution of the Soviet Union and the end of the cold war, ASEAN moved in a new direction to meet with the challenges of globalization. The three Indochinese states became members.

ASEAN map

From the early 1990s ASEAN looked for increasing economic cooperation among member countries. At the Fourth ASEAN Summit held in Singapore in January 1992 an agreement was signed for the creation of an ASEAN Free Trade Area (AFTA) within 15 years. The 1995 Bangkok Summit passed a resolution on the Agenda for Greater Economic Integration.

The time frame of AFTA was reduced to 10 years. The ASEAN Vision 2020, adopted in 1997, envisaged an ASEAN Economic Region. There would be closer economic integration along with reduction of poverty and removal of economic disparities. The Framework Agreement for the Integration of Priority Sectors and its Protocols of 1999 called for the creation of a single market and production base.

In 1994 the ASEAN Regional Forum (ARF) was established with non-ASEAN countries like the United States, Russia, China, India, and others to discuss security issues and take steps in confidence building. There was an agenda for an enhanced role of the ARF in matters of security dialogue and cooperation.


Meetings on this topic were held in the Cambodian capital and in Potsdam, Germany, in 2004 and 2005 respectively. The December 2005 ASEAN Summit, held in Kuala Lumpur, noted with satisfaction progress toward a Free Trade Area, with such countries as Australia, China, Japan, New Zealand, India, and the Republic of Korea.

ASEAN cooperates with the East Asian nations of China, Japan, and the Republic of Korea, which were accorded the special status of ASEAN Plus Three. They expected to have a free-trade agreement by the year 2010. India enjoys a special standing with ASEAN. An ASEAN-India Partnership for Peace and Progress was signed at the Third ASEAN-India Summit in November 2004.

The ASEAN and its member countries have taken steps, through treaties, conventions, and communiqués, to prevent different types of organized crime with regional and international dimensions, such as terrorism, terrorist financing, money laundering, human trafficking, and drug smuggling.

On February 24, 1976, the ASEAN countries declared that they would cooperate with one another and with international organizations to check illegal trafficking of drugs. The ASEAN Vision 2020 resolved to tackle the problems of drug trafficking, trafficking of women, and other transnational crimes.

Through organizations like the ARF, Ministerial Meetings, the ASEAN Chiefs of Police (ASEANAPOL), the ASEAN Centre for Combating Transnational Crime (ACTC), the Senior Officials Meeting on Transnational Crime (SOMTC), and the ASEAN Ministerial Meeting on Transnational Crime (AMMTC), steps were taken to prevent various forms of crimes affecting Southeast Asia in particular and the world in general. The Vientiane Action Program of November 2004 contained measures to tackle the problem of terrorism.

Bandung Conference (Asian-African Conference)

Bandung Conference (Asian-African Conference)

The Bandung Conference, or Asian-African Conference, attended by 29 primarily newly independent nations, was held in 1955. The Indonesian leader Ahmed Sukarno hosted the conference of so-called Third World nations, most of which had become independent after World War II and were generally poor, agricultural, and economically underdeveloped. They represented over half the world’s population.

India’s leader Jawaharlal Nehru played a key role in the conference that adopted his principles of opposing imperialism and focusing on the development of local economies rather than reliance on either the Western world led by the United States or the Soviet bloc dominated by the Soviet Union. Participants of the conference also raised issues of race, religion, and world peace. Most were, however, authoritarian in their political orientations.


The Chinese prime minister, Zhou Enlai (Chou En-lai), was another key spokesperson at the conference. Aware of the different political and economic approaches of the participants, Zhou wisely did not push an aggressive communist program and succeeded in establishing ties with other Asian and African leaders. Other leaders at the conference included Kwame Nkrumah, prime minister of the Gold Coast (Ghana); Ho Chi Minh, the North Vietnamese prime minister; and President Gamal Abdel Nasser of Egypt.

The nations of North Africa also attended and condemned French imperialism. Nasser spoke about the role of Pan-Arabism and Pan-Africanism as well as the cause of Palestinian self-determination. Nasser, Nehru, and President Tito of Yugoslavia subsequently became personal friends and exchanged state visits with one another.

gedung merdeka in Bandung

Many of the participants of the Bandung Conference became leaders of the Nonaligned Movement in the early 1960s. The Nonaligned Movement sought to steer a middle or neutral course between the United States and the Soviet Union in the cold war.

Neither superpower endorsed the Nonaligned Movement, although the United States tended to be more hostile to the neutralism of nations seeking to maximize their own benefits rather than adopting policies that mirrored that of either superpower. Many leaders of African and Asian nations attended a conference in both Bandung and Jakarta marking the 50th anniversary of the conference in 2005.

Dutch New Guinea/West Irian

Dutch New Guinea/West Irian

On the western side of Papua New Guinea (PNG) is situated West Irian, a province of Indonesia. A colony of the Netherlands after August 1828, it was known earlier as Dutch New Guinea or West New Guinea. In 1961 it was renamed Irian Barat (West Irian), and in 1973 it was renamed Irian Jaya.

The whole of western New Guinea was named Papua in 2002. In February 2003 the western portion of Papua was separated and renamed Irian Jaya. The Indonesia constitutional court in 2004 did not allow the division of Papua into three regions, but accepted the creation of the West Irian Jaya province, carved from Papua’s western region.

The Netherlands controlled Dutch New Guinea even after the Hague Agreement of December 1949, which transferred sovereignty to the Indonesian federal government. The Indonesian leader Ahmed Sukarno (1901–70) did not want any remnant of Dutch colonialism. The Indonesian army occupied New Guinea in 1961.


An agreement was signed on August 15, 1962, by which power was transferred to the United Nations Temporary Executive Authority (UNTEA) for six years from 1963. Indonesia had administrative power over the territory from May 1, 1963. West Irian was incorporated with Indonesia as its 27th province in November 1969.

This Act of Free Choice was not accepted by various groups and raised controversy. In the U.S. Congress a bill was brought in 2006 that questioned the validity of the Act of Free Choice. The independence leaders also had not accepted the merger of West Irian with Indonesia in the act.

Opposition to Indonesian rule and the desire for independence as a free nation were held by a sizable portion of the population. In December 1963 the Organisasi Papua Merdeka (OPM, or Free Papua Movement) was established. It launched a guerrilla campaign against the Indonesian government in 1970 and set up an independent government the next year. Its military wing, known as the Liberation Army of OPM, indulged in terrorist activities.

Kelly Kwalik, the commander, was responsible for the kidnapping of Indonesians and foreigners. He had also targeted the multinationals operating in the region. Moses Werror was the chairperson of the Revolutionary Council of OPM, based in Madang, Papua New Guinea. The Satgas Papua is another proindependence organization.

Theys Hijo Eluay’s (1937– 2001) Lembaga Musyawarah Adat Papua (Papuan Customary Council Assembly) believed in nonviolent methods. Eluay was murdered in 2001. The Indonesian armed forces along with its paramilitary group, Barisan Merah Putih, was active in suppressing the secessionist movement.

The clashes between the army and the rebels continued from 2003 to 2004. The Papua governor, J. P. Salossa, wanted serious implementation of autonomy status. The Indonesian president, Susilo Bambang Yudhoyono, had invited Governor Salossa and Papua provincial council speaker Jhon Ibo to Jakarta on August 10, 2006, for talks.

Indonesian Communist Party (PKI)

PKI in Batavia (now Jakarta) - 1925

The left movement in Indonesia began within the Sarekat Islam (Islamic Association), established in 1911. Henk Sneevliet established the Indische Sociaal Democratische Vereenigin (ISDV, Indies Social Democratic Association) in 1914 and worked within the Sarekat Islam.

After the Russian Revolution of 1917 the ISDV increased its membership, and in May 1920 it changed its name to Partai Kommunist Indonesia (PKI, Communist Party of Indonesia), which became the first communist party in Asia.

It was expelled by the Sarekat Islam. The PKI organized strikes, and Dutch authorities, alarmed, expelled leaders like Sneevliet and Tan Malaka. The policy of repression by the government made the PKI popular, and it organized large-scale strikes in 1926.


In November the Republic of Indonesia was proclaimed. After proclamation of the Republic of Indonesia on August 17, 1945, by Ahmed Sukarno (1901–70) the PKI believed it to be Japanese sponsored and fascist. The republic successfully crushed two communist rebellions in 1946 and 1948.

There was a change in PKI’s direction after 1950 under the leadership of Dipa Nusantara Aidit. It had an agenda of nationalist commitment and supported Sukarno’s anticolonial policy. In the first general elections of 1955 the PKI was aligned with the Perserikatan Nasional Indonesia (PNI, Indonesian Nationalist Union), founded by Sukarno in June 1927.

The PKI received 16.4 percent of the votes, and in the newly elected parliament it had 39 seats. With maneuvering and a dedicated party cadre, the PKI had become a political force to be reckoned with in the country.

Dipa Nusantara Aidit

n July 1957 the PKI made advances in municipal elections. The PKI had become vocal about the Dutch control of West New Guinea (Irian Jaya/Papua). In the wake of a campaign to annex it, the members of PKI as well as PNI seized control of Dutch industries in December 1957.

The PKI’s voice against the dominance of foreign capital in Indonesia gradually led to the nationalization of major industries. Religious parties like Islamist Masyumi were in favor of declaring the PKI illegal. The party had found Sukarno as an ally and supported his Guided Democracy.

The PNI, PKI, and Nahdatul Ulema were among the major political parties that were allowed to function. After the abortive coup of February 1958, martial law was imposed by Sukarno, and the PKI supported it. By 1960 the PKI could influence Sukarno on internal and foreign policy of the country.

The situation in Indonesia during the 1960s was ripe for a communist insurrection, and the PKI exploited the situation to its maximum potential. The crop failure in central Java in February 1964 resulted in a starving population of 1 million.

Both Sukarno and the PKI launched the Crush Malaysia campaign. PKI cadres crossed over the border and took part in guerrilla warfare in Sarawak and north Borneo. The United States terminated military aid in September 1963.

The PKI had begun a program of arming the people. It had become the third-largest communist party in the world, with a membership of 3.5 million. It had the direct support of 20 million people through its varied organizations. On the night of September 30, 1965, six top army generals were rounded up, taken to the Halim Air Force Base, and brutally killed.

The identity of the perpetrators of the crime was not known, but blame was placed on the PKI. The Gerakan on September 30 resulted in violent retribution against the PKI. There was a slaughter of a half-million Communists, including the Chinese. The PKI was outlawed in March 1966.

General Haji Mohamed Suharto (1921– ), who had taken leadership in crushing the coup, became the acting president in March 1967. Sukarno remained under house arrest until his death on June 21, 1970. Suharto established the Kopkamtib (Operational Command for the Restoration of Security and Order) to scuttle the opposition, muzzle the press, and prevent the reemergence of the PKI.

There was otokritik (selfcriticism) by exiled PKI members in Beijing. In 1999 President Abdurrahman Wahid asked the exiled PKI leaders to come back to open a dialogue, but the proposal did not find favor with fundamentalist Islamic groups.

Haji Mohammad Suharto

The second president of Indonesia after Sukarno, General Haji Mohammad Suharto was born June 8, 1921, in Kemusuk Argamulja, central Java. His military career began with the Japanese occupation from 1942 to 1945.

After Sukarno’s declaration of independence in 1945, Suharto fought against the Dutch and later joined the Indonesian National Army. In the violent upheaval of 1965, he was instrumental in crushing the Partai Komunis Indonesia (PKI, or Indonesian Communist Party) coup and rose rapidly after this event.

As Sukarno’s political authority weakened, Suharto began to strengthen his position. By an executive order in 1966, Sukarno was forced to grant emergency powers to Suharto. Under Suharto Orde Baru (New Order) was established, emphasizing economic development and social harmony.

Relations with Western countries improved and confrontation with Malaysia ended, but relations with China deteriorated. Indonesia became a founding member of the Association of Southeast Asian Nations (ASEAN). The military became powerful and extended its hold over economic management, which led to large-scale corruption.


Suharto also restricted political party activity. By March 1967 he was the acting president and he was elected president on March 21, 1968. He continued to hold the office until 1998, being reelected unopposed five times. His Golkar Party also won every election during this time.

Suharto’s regime suppressed secessionist movements and added Western New Guinea, a former Dutch colony under United Nations (UN) temporary executive authority after a stage-managed election in 1969. However, he had to deal with the Organisasi Papua Merdeka (OPM, or Free Papua Movement) and its guerrilla campaign against the government of Indonesia.

Suharto also faced problems from the province of Aceh after the formation of the Gerakan Aceh Merdeka (GAM, or Free Aceh Movement), which demanded independence in 1976. He suppressed the rebellion by force and martial law, but discontent remained.

East Timor was a former Portuguese colony. Suharto ordered an invasion and incorporated it into Indonesia in 1976. A guerrilla war against Indonesian occupation continued amid reports of brutality by the army.

In 1998 talks between Portugal, Indonesia, and the United Nations resulted in a plebiscite for the East Timorese people. However, the Indonesian army and a pro-Indonesian militia unleashed a reign of terror in the region that killed more than 1,300 people and sent 300,000 people fleeing into West Timor.

Suharto faced challenges on the economic front also, as his profligate spending and corruption forced the economy to falter. Beginning in the 1990s, opposition to his authoritarian regime gained intensity.

The financial crisis of Asia in 1997 resulted in the plummeting value of the Indonesia currency, which lost 80 percent of its value in 1998. Riots escalated after May 1998, causing him to resign on May 21, 1998. He was replaced by Vice President Jusuf Habibie.

Suharto was placed under house arrest in 2000. In 2003 the Human Rights Commission of Indonesia began to examine atrocities committed under his regime. By then Suharto was in poor health, often hospitalized, and therefore spared prosecution. Indonesia returned to democratic government after his fall. Suharto died in Jakarta on January 27, 2008, from multiple organ failure.

Ahmed Sukarno

Ahmed Sukarno

A charismatic leader, Ahmed Sukarno left an indelible imprint on the history and politics of Indonesia. Born on June 6, 1901, he was the most important leader of the nationalist movement and the first president of the Indonesian Republic.

After graduating from Bandung Technische Hoogeschool in 1926, Sukarno joined the nationalist movement and was instrumental in establishing the Perserikatan Nasional Indonesia (PNI, Indonesian Nationalist Union) on July 4, 1927. The PNI voiced the indigenous sentiment against colonial rule. He was imprisoned and exiled, returning to Jakarta after the Japanese occupation in 1942. Sukarno had a flair for flamboyant oratory.

Sukarno enumerated the Pancasila, or five moral postulates, on June 1, 1945, as guidelines for governing Indonesia: nationalism, internationalism, consent, social justice, and belief in God. Unable to suppress the independence movement, the Netherlands signed the Hague Agreement of December 27, 1949, ending its colonial rule. Sukarno and Muhammad Hatta became president and prime minister, respectively.

The new constitution provided for a parliamentary form of government in which president Sukarno was a mere figurehead, with his rivals dominating the political scene. There was political instability and the collapse of five successive cabinets in six years. There were revolts against the central authority in West Java, Kalimantan, south Sulawesi, and Sumatra.


Sukarno criticized the ineffective government and began to assert his authority gradually from 1955, instituting a "guided democracy" in 1957 that replaced democratic with authoritarian rule. On July 5, 1959, Sukarno reinstituted the 1945 constitution, assuming executive authority, ruling by decree. In July 1963 Sukarno was made president for life by a compliant assembly.

From the early 1960s Sukarno directed his attention to grandiose plans of projecting Indonesia into the international arena and himself as leader of the nonaligned bloc.

Examples of his image building were his hosting of the 29-nation Afro-Asian conference at Bandung in 1955. He also hosted the Asian Games and the games of the Newly Emerging Forces (NEF). In 1957 he nationalized Dutch businesses. In 1963 he annexed the western half of Papua New Guinea, or Dutch New Guinea.

Sukarno broke off relations with the newly formed Malaysia in 1963 and attempted to destabilize it by guerrilla attacks. Indonesia withdrew from the United Nations after the admission of Malaysia.

Sukarno then consulted communist nations with Moscow responding with foreign aid. Domestically, inflation, corruption, deficit spending, and victimization of the Chinese business community led to economic ruin. Inflation reached a staggering proportion, and the economy was on the brink of collapse.

Sukarno and his first lady Rahmawati

The attempted coup in September 1965 sealed Sukarno’s fate. General Haji Mohammad Suharto took leadership in crushing the coup on September 30. As a result, the political authority of Sukarno was fatally weakened by Suharto, who became the president in March 1967. Sukarno, stripped of presidential powers, was banned from any political activity and remained under house arrest in Jakarta until his death on June 21, 1970.

There was a revival of the popularity of Sukarno in 1980s, because many people had become disenchanted with the dictatorial military regime of Suharto. They honored his struggle against colonialism. Megawati Sukarnoputri, his eldest daughter, became the symbol of the pro-democracy movement that opposed Suharto, and she was elected president of Indonesia from 2001 to 2004.