Opium and the Indonesian Revolution

Abstract

The Indonesian revolution was a costly affair. Not only was it accompanied by the extensive destruction of life and property, but the actual logistics of fighting a protracted revolution placed enormous financial demands on the new Indonesian Republic, founded on 17 August 1945, three days after the Japanese surrendered, at a time when the revolutionary government was decidedly ill-equipped to meet them. The Republic was unable to take over immediately all the revenue sources of the colonial government and faced major difficulties in rapidly building up an alternative taxation structure. Needing a ‘soft’ form of taxation which was easily collected and which did not fall too obtrusively on the shoulders of its citizens, it turned to opium. The sale of opium to addicts had been used by colonial governments in Southeast Asia as a source of revenue, although its importance had greatly declined in the twentieth century. The Republic, however, not only maintained the colonial distribution and sales network but expanded its use of opium to make the drug an important source of government revenue and, for a time, a major source of foreign exchange.