The Dutch ruled Indonesia for more than 350 years by using the strategy of "divide and rule". Whenever confronted with the people's wrath, they used the Chinese settlers as a shield to deflect the anger, and cleverly created the impression that they gave special protection and privileges to the Chinese.

But what was the reality?

Chinese settlers came to south-east Asia in the 7th century. When the Europeans arrived in the 15th century, the Chinese were the principal agents of trade between the Indonesian islands, China, India and other countries, and within Indonesia between rural areas and towns.

At that time, the Chinese and the indigenous people, the Pribumi, co-existed with no signs of racial tension. Immigration of Chinese continued until the outbreak of World War II.

Although in Java many Chinese were in business, many more were making a living as carpenters, cabinet-makers, vendors, restaurant owners and workers. Outside Java, particularly in Sumatra and Kalimantan (Borneo), the majority of the Chinese were labourers in Dutch mines and plantations.

The East Indies Company, and later the colonial government, made use of the trade network already established by the Chinese and, initially, the two groups were in close collaboration.

Prominent Chinese businessmen became community leaders, and the Dutch recognised their importance by naming them "lieutenant", "captain" or "major of the Chinese". As the economy grew, however, and colonial rule was consolidated, the role and influence of the Chinese was circumscribed in policy.

The "pass and zoning system" was established in 1863, and vestiges of it survived until the 1930s. Chinese were confined to designated precincts, giving rise to the characteristic Chinese quarters (Pecinans) of towns and cities in Java, reminiscent of Jewish ghettoes in Europe.

Travel for the Chinese was also restricted by the requirement of travel passes, which were normally valid only between the place of residence and the place of work.

It was only after repeated protests by the Chinese that the restrictions were gradually lifted, beginning at the turn of this century.

The colonial subjects were grouped along ethnic lines and distinctions between Pribumi and Chinese were made in the courts and in schooling.

The overall result of these policies was that the Chinese in the Netherlands East Indies became marginalised and demonised. The colonial exploitation and poverty of the people, and all sorts of other ills in society were blamed on the Chinese.

Anti-Chinese sentiments turned into violence during the revolution of 1945-1949. There are reports of Dutch authorities organising criminals from jails under their control to commit atrocities in Chinese districts in Indonesian-held territories. When Dutch forces "came to the rescue", quelling the marauding mobs, the impression was created that the Chinese were protected by the Dutch and in alliance with them.

The perception that the Chinese were disloyal led to many violent outbursts of anger, causing many Chinese to flee Indonesian-held territories into Dutch-occupied areas. The Dutch used this as "evidence" that Indonesians could not maintain law and order and should not be granted independence.

Because of the loss of life, property and dignity, many Chinese opted to support the Dutch or look towards China.

With Indonesia's independence in 1949-1950, however, Chinese political leaders were generally successful in convincing their compatriots that they had no choice but to consider Indonesia their country.

Between 1950-59, rather than to rid Indonesia of its colonial economy by nationalising Dutch companies, the political elite considered it politically more expedient to take over businesses that for a long period were in Chinese hands.

The PP-10 regulation, enacted in 1959, banned Chinese who did not hold Indonesian citizenship from living in and owning business in small towns and villages. More than 100,000 people were displaced and left Indonesia for China in 1959 and 1960.

At the same time, there were moves afoot to minimise the number of Chinese eligible for citizenship, raising the fears that the restrictive business regulations would deprive many people of their livelihoods.

The proposed changes -- which would have defined as aliens those people granted Indonesian citizenship under the 1946 legislation and under the agreement made with the Dutch in 1949 -- were eventually defeated by concerted opposition from Chinese members of parliament.

During the years of "Guided Democracy" (1959-1965), many of the discriminatory laws and regulations were revoked. The position of the Chinese in Indonesia benefited from the close ties that President Sukarno had with China.

Racial violence still occurred, but the government always quickly condemned and suppressed it. Significantly, the Provisional People's Consultative Assembly in 1965 accepted the policy of utilising domestic, Chinese-owned capital for purposes of national economic development.

When Suharto came to power towards the end of 1965, he accused the Chinese Indonesians' of loyalty to Communist China and persecuted them accordingly.

Chinese schools were ordered to close, and the use of Chinese languages and writing in public was banned. Chinese people adopted Indonesian names en masse under official urging. Even as discriminatory regulations were issued thick and fast, anti-Chinese riots continued.

Like the Dutch before him, Suharto employed the strategy of "divide and rule" with great effect. While for certain groups the impression was created that the Chinese were Suharto's allies, for others the Chinese were responsible for the general poverty amongst the populace.

Government officials and military officers frequently vilified them and the racial riots were usually incited by provocateurs, agents of Suharto, who urged the crowds to loot, rape, even kill, and to destroy Chinese property.

In the closing stages of Suharto's government, orchestrated anti-Chinese hostilities were evident.

On May 13 and 14, truckloads of men wearing crew cuts and military boots appeared in predominantly Chinese neighbourhoods and incited the crowds to attack houses and shops, to loot and to torch them.

These men were also responsible for the atrocities perpetrated against hundreds of Chinese women, who were gang-raped and in some cases murdered.

These acts of terror were clearly organised. As thousands of victims cried for help, the authorities simply stood by and were slow to take action to restore order. Only after lives were lost and there had been extensive destruction of property were troops deployed.

Arrests were made, but they were limited to flunkeys unfortunate enough to be caught. Those who pulled the strings behind the scenes are still at large.

During those two days of rioting in Jakarta, 40 large shopping complexes, 4100 shops and offices, and 1200 residences were destroyed. An estimated 2000 people lost their lives and thousands were traumatised by the horrific experiences inflicted on them.

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Siauw Tiong Djin is convenor of the Melbourne-based Committee Against Racism in Indonesia. He is currently researching aspects of the history of the Chinese in Indonesia at Monash University. This articled is abridged from his paper on the current reform struggle in Indonesia and the issue of minorities. -Green Left Weekly

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