MOST American forecasters in the first half of 1955 were optimistic about the United States economy, but many were gloomy about the prospects for Asia. The head-shaking over Indonesia was particularly grave.1 Such a pessimistic outlook was perhaps a natural reaction to the sanguine attitude that followed the Indonesian achievement of freedom from the Dutch on December 27, 1949. In Indonesia itself, a battle raged in 1955—culminating in the overthrow of the Ali cabinet—between those out of power who blamed the cabinet for inflation, insecurity, and corruption, and those in power who tried to place the onus on previous cabinets, the Dutch, and remnants of colonialism. Indonesian newspapers played up these disputes with perhaps even more vigor than the American press handles party differences within the United States.
Indonesia is a classic example of a recently freed, former colony. Winning sovereignty from the Netherlands ended the first and basically the simpler phase of the revolution. The second phase, more difficult and much more gradual, must evolve new institutions to make the country a truly independent power and ensure economic development with a rising standard of living for her people. She is struggling with the usual boom-and-bust cycle that characterizes araw-material producing country. In the 1930's, she suffered through the sugar depression. Since she gained her freedom, rubber, tin, and copra, comprising over 70 per cent of her exports, have give hera hectic ride on the roller coaster of world prices.