The Model Pupil [Indonesia] excerpted from the book The New Rulers of the World

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Flying into Jakarta, it is not difficult to imagine the city below fitting the World Bank's description of Indonesia. A 'model pupil of globalisation' was the last of many laurels the bank bestowed. That was almost five years ago. Within weeks, short-term global capital had fled the country, the stock market and currency had crashed, and the number of people living in absolute poverty had reached almost 70 million. The next year, 1998, General Suharto was forced to resign after thirty years as dictator, taking with him severance pay estimated at $15 billion, the equivalent of almost 13 percent of his country's foreign debt, much of it owed to the World Bank.'

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Nike workers get about 4 per cent of the retail price of the shoes they make, which is not enough to buy the laces.

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The workers I met later, secretly, told me: 'If Gap trousers have to be finished, we don't leave. We stay till the order is full, no matter the time. If you want to go to the toilet, you have to be lucky. If the supervisor says no, you shit in your pants . . . we are treated like animals because we have to work hard all the time without saying a word.'

I told them the Gap company boasted about a 'code of conduct' that protected workers' basic rights.

'We've never seen it,' they said. 'Foreigners from Gap come to the factory, but they are interested only in quality control and the rate of production. They never ask about working conditions. They don't even look at us.'

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Agribusiness in the West, especially the United States and Europe, has produced its famous surpluses and export power only because of high tariff walls and massive domestic subsidies. The result has been a monopoly on humanity's staples

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... according to a CIA memorandum, Prime Minister Harold Macmillan and President John Kennedy had agreed to 'liquidate President Sukarno, depending on the situation and available opportunities'. The CIA author added, 'It is not clear to me whether murder or overthrow is intended by the word liquidate.'

Sukarno was a populist, the founder of modern Indonesia and of the non-aligned movement of developing countries, which he hoped would forge a genuine 'third way' between the spheres of the two superpowers. In 1955, he convened the 'Asia-Africa Conference' in the Javanese hill city of Bandung. It was the first time the leaders of the developing world, the majority of humanity, had met to forge common interests: a prospect that alarmed the western powers, especially as the vision and idealism of nonalignment represented a potentially popular force that might seriously challenge neo-colonialism. The hopes invested in such an unprecedented meeting are glimpsed in the faded tableaux and black-and-white photographs in the museum at Bandung and in the forecourt of the splendid art deco Savoy Hotel, where the following Bandung Principles are displayed:

I - Respect for fundamental human rights and the principles of the United Nations Charter.

2 - Respect for the sovereignty and territorial integrity of all nations.

3 - The recognition of the equality of all peoples.

4 - The settlement of disputes by peaceful means.

Sukarno could be a democrat and a demagogue. For a time, Indonesia was a parliamentary democracy, then became what he called a 'guided democracy'. He encouraged mass trade unions and peasant, women's and cultural movements. Between 1959 and 1965, more than 15 million people joined political parties or affiliated mass organisations that were encouraged to challenge British and American influence in the region. With 3 million members, the PKI was the largest communist party in the world outside the Soviet Union and China. According to the Australian historian Harold Crouch, 'the PKI had won widespread support not as a revolutionary party but as an organisation defending the interests of 'the poor within the existing system'. It was this popularity, rather than any armed insurgency, that alarmed the Americans. Like Vietnam to the north, Indonesia might 'go communist' .

In 1990, the American investigative journalist Kathy Kadane revealed the extent of secret American collaboration in the massacres of 1965-66 which allowed Suharto to seize the presidency. Following a series of interviews with former US officials, she wrote, 'They systematically compiled comprehensive lists of communist operatives. As many as 5,000 names were furnished to the Indonesian army, and the Americans later checked off the names of those who had been killed or captured.' One of those interviewed was Robert J Martens, a political officer in the US embassy in Jakarta. 'It was a big help to the army,' he said. 'They probably killed a lot of people and I probably have a lot of blood on my hands, but that's not all bad. There's a time when you have to strike hard at a decisive moment.' Joseph Lazarsky, the deputy CIA station chief in Jakarta, said that confirmation of the killings came straight from Suharto's headquarters. 'We were getting a good account in Jakarta of who was being picked up,' he said. 'The army had a "shooting list" of about 4,000 or 5,000 people. They didn't have enough goon squads to zap them all, and some individuals were valuable for interrogation. The infrastructure [of the PKI] was zapped almost immediately. We knew what they were doing . . . Suharto and his advisers said, if you keep them alive you have to feed them.'

Having already armed and equipped much of the army, Washington secretly supplied Suharto's troops with a field communications network as the killings got under way. Flown in at night by US air force planes based in the Philippines, this was state-of-the-art equipment, whose high frequencies were known to the CIA and the National Security Agency advising President Johnson. Not only did this allow Suharto's generals to co-ordinate the killings, it meant that the highest echelons of the US administration were listening in and that Suharto could seal off large areas of the country. Although there is archive film of people being herded into trucks and driven away, a single fuzzy photograph of a massacre is, to my knowledge, the only pictorial record of what was Asia's holocaust

The American Ambassador in Jakarta was Marshall Green, known in the State Department as 'the coupmaster'. Green had arrived in Jakarta only months earlier, bringing with him a reputation for having masterminded the overthrow of the Korean leader Syngman Rhee, who had fallen out with the Americans. When the killings got under way in Indonesia, manuals on student organising, written in Korean and English, were distributed by the US embassy to the Indonesian Student Action Command (KAMI), whose leaders were sponsored by the CIA.

On October 5, 1965, Green cabled Washington on how the United States could 'shape developments to our advantage'. The plan was to blacken the name of the PKI and its 'protector', Sukarno. The propaganda should be based on '[spreading] the story of the PKI's guilt, treachery and brutality'. At the height of the bloodbath, Green assured General Suharto: 'The US is generally sympathetic with and admiring of what the army is doing.'' As for the numbers killed, Howard Federspiel, the Indonesia expert at the State Department's Bureau of Intelligence and Research in 1965, said, 'No one cared, as long as they were communists, that they were being butchered. No one was getting very worked up about it.'

The Americans worked closely with the British, the reputed masters and inventors of the 'black' propaganda admired and adapted by Joseph Goebbels in the 1930s. Sir Andrew Gilchrist, the Ambassador in Jakarta, made his position clear in a cable to the Foreign Office: 'I have never concealed from you my belief that a little shooting in Indonesia would be an essential preliminary to effective change.' With more than 'a little shooting' under way, and with no evidence of the PKI's guilt, the embassy advised British intelligence headquarters in Singapore on the line to be taken, with the aim of 'weakening the PKI permanently'.

Suitable propaganda themes might be: PKI brutality in murdering Generals and [Foreign Minister] Nasution's daughter . . . PKI subverting Indonesia as agents of foreign Communists . . . But treatment will need to be subtle, e.g. (a) all activities should be strictly unattributable, (b) British participation or co-operation should be carefully concealed.

Within two weeks, an office of the Foreign Office's Information Research Department (IRD) had opened in Singapore. The IRD was a top-secret, cold war propaganda unit headed by Norman Reddaway, one of Her Majesty's most experienced liars. It would be salutary for journalists these days to study the critical role western propaganda played then, as it does now, in shaping the news. Indeed, Reddaway and his colleagues manipulated the press so expertly that he boasted to Gilchrist in a letter marked 'secret and personal' that the story he had promoted - that Sukarno's continued rule would lead to a communist takeover - 'went all over the world and back again' . He described how an experienced Fleet Street journalist agreed 'to give exactly your angle on events in his article ... . i.e. that this was a kid glove coup without butchery.'

Roland Challis, the BBC's South-East Asia correspondent, was a particular target of Reddaway, who claimed that the official version of events could be 'put almost instantly back to Indonesia via the BBC'. Prevented from entering Indonesia along with other foreign journalists, Challis was unaware of the extent of the slaughter. 'It was a triumph for western propaganda,' he told me. 'My British sources purported not to know what was going on, but they knew what the American plan was. There were bodies being washed up on the lawns of the British consulate in Surabaya, and British warships escorted a ship full of Indonesian troops down the Malacca Straits so that they could take part in this terrible holocaust. It was only much later that we learned the American embassy was supplying names and ticking them off as they were killed. There was a deal, you see. In establishing the Suharto regime, the involvement of the IMF and the World Bank was part of it. Sukarno had kicked them out; now Suharto would bring them back. That was the deal.'

With Sukarno now virtually powerless and ill, and Suharto about to appoint himself acting president, the American press reported the Washington-backed coup not as a great human catastrophe, but in terms of the new economic advantages. The massacres were described by Time as 'The West's Best News in Asia'. A headline in US News and World Report read: 'Indonesia: Hope . . . where there was once none'. The renowned New York Times columnist James Reston celebrated 'A gleam of light in Asia' and wrote a kid-glove version that he had clearly been given. The Australian Prime Minister Harold Holt, who was visiting the US, offered a striking example of his sense of humour: 'With 500,000 to a million communist sympathisers knocked off,' he said approvingly, 'I think it's safe to assume a reorientation has taken place.'

Holt's remark was an accurate reflection of the complicity of the Australian foreign affairs and political establishment in the agony of its closest neighbour. The Australian embassy in Jakarta described the massacres as a 'cleansing operation'. The Australian Ambassador, KCO Shann, enthused to Canberra that the Indonesian army was 'refreshingly determined to do over the PKI', adding that the generals had spoken approvingly of the reporting on Radio Australia, which he described as 'a bit dishonest'.' In the Prime Minister's Department, officials considered supporting 'any measures to assist the Indonesian army ... cope with the internal situation'.

In February 1966, [British] Ambassador Gilchrist wrote a report on the scale of the massacres based on the findings of the Swedish Ambassador, who had toured central and eastern Java with his Indonesian wife and had been able to speak to people out of earshot of government officials. Gilchrist wrote to the Foreign Office: 'The Ambassador and I had discussed the killings before he left [on the tour] and he had found my suggested figure of 400,000 quite incredible. His enquiries have led him to reconsider it a very serious under-estimate. A bank manager in Surabaya with twenty employees said that four had been removed one night and beheaded . . . A third of a spinning factory's technicians, being members of a Communist union, had been killed ... The killings in Bali had been particularly monstrous. In certain areas, it was felt that not enough people [emphasis in the original] had been killed.'

On the island of Bali, the 'reorientation' described by Prime Minister Holt meant the violent deaths of at least 80,000 people, although this is generally regarded as a conservative figure. The many western, mostly Australian, tourists who have since taken advantage of cheap package holidays to the island might reflect that beneath the car parks of several of the major tourist hotels are buried countless bodies.

The distinguished campaigner and author Carmel Budiardjo, an Englishwoman married to a tapol and herself a former political prisoner, returned to Indonesia in 2000 and found 'the trauma left by the killings thirty-five years ago still gripping many communities on the island'. She described meeting, in Denpasar, fifty people who had never spoken about their experiences before in public. 'One witness,' she wrote, 'who was 20 years old at the time calmly told us how he had been arrested and held in a large cell by the military, 52 people in all, mostly members of mass organisations from nearby villages. Every few days, a batch of men was taken out, their hands tied behind their backs and driven off to be shot. Only two of the prisoners survived . . . Another witness, an ethnic Chinese Indonesian, gave testimony about the killing of 103 people, some as young as 15. In this case, the people were not arrested but simply taken from their homes and killed, as their names were ticked off a list.'

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'In the early sixties,' he said, 'the pressure on Indonesia to do what the Americans wanted was intense. Sukarno wanted good relations with them, but he didn't want their economic system. With America, that is never possible. So he became an enemy. All of us who wanted an independent country, free to make our own mistakes, were made the enemy. They didn't call it globalisation then; but it was the same thing. If you accepted it, you were America's friend. If you chose another way, you were given warnings, and if you didn't comply, hell was visited on you. But I am back; I am well; I have my family. They didn't win.'

Ralph McGehee, a senior CIA operations officer in the 1960s, described the terror in Indonesia from 1965 - 66 as a 'model operation' for the American-run coup that got rid of Salvador Allende in Chile seven years later. 'The CIA forged a document purporting to reveal a leftist plot to murder Chilean military leaders,' he wrote, '[just like] what happened in Indonesia in 1965.' He says Indonesia was also the model for Operation Phoenix in Vietnam, where American-directed death squads assassinated up to 50,000 people. 'You can trace back all the major, bloody events run from Washington to the way Suharto came to power,' he told me. 'The success of that meant that it would be repeated, again and again.'

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Indonesia, once owing nothing but having been plundered of its gold, precious stones, wood, spices and other natural riches by its colonial masters, the Dutch, today has a total indebtedness estimated at $262 billion, which is 170 per cent of its gross domestic product. There is no debt like it on earth. It can never be repaid. It is a bottomless hole.

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Today, in rebellious West Papua, the army openly supports an Islamic group, Lashkar Jihad, while playing its traditional role of terrorising the local population in order to 'protect' the vast multinational Freeport copper and gold mine, the world's largest. In Aceh, where the American Exxon company has holdings in oil drilling and liquefied natural gas, human rights violations by the army are well documented.

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The United States and Australia, in the meantime, have quietly resumed training the officer corps of a military that has never repudiated its genocidal past. In the name of the 'war on terror', the state terrorism that the West backed for forty years is making a comeback.