The Indonesianisasi of Koninklijke Paketvaart Maatschappij in 1950-1960

Interisland shipping plays and essential role in the social and economic development of the archipelago. Dutch firms have had significant contributions in the growth of the Dutch East Indies, especially the shipping company Koninklijke Paketvaart Maatschappij, by binding islands and overcoming distance, and continued to do so after Indonesia declared its independence. In the transitional period of 1950-1960 subsequent to Indonesia’s national revolution, nationalist leaders recognized that political independence did not entail social and economic independence. The construction of the architecture of postcolonial Indonesia that is in line with the principles embedded within the state’s foundation of Pancasila would not be realized under the existing colonial framework. However, Indonesia was still heavily dependent on the technology, capital, and management of its former colonizer, which created the necessity of the formulation of a system of cooperation that may guide the economy to achieve stability before concluding in absolute independence. This created a momentum in implementing the process of economic decolonization through Indonesianisasi, to address the concern of Indonesian personnel advancing to higher positions within firms and in addressing issues of ownership. With the framework of economic decolonization, the economic factor behind Indonesianisasi had been the focus when assessing the process. However, there are numerous elements influencing the Indonesianisasi itself, which derive from the local dynamics and from international pressure. Three of the most prominent elements include the economic factor, the personal consideration taken by President Sukarno, and the dispute between the Netherlands and Indonesia regarding the territorial claim of West New Guinea. These elements are assessed respectively to identify the most imperative factor that had shifted the gradual approach in the elimination of Dutch economic dominance into an approach that is done rapidly, without adequate planning, with the KPM as its main target as a symbol of Dutch economic dominance. External factors alone do not have the capacity in influencing the measure in the implementation of the decolonization process to a great extent, internal forces and personal interests were rather the drive that had resulted in the downfall of the Indonesian economy.