Sjafruddin Prawiranegara (EYD: Syafruddin Prawiranegara; 28 February 1911 – 15 February 1989) was an Indonesian statesman and economist. He served in various roles during his career, including as head of government in the Emergency Government of the Republic of Indonesia (acting president of Indonesia), as Minister of Finance in several cabinets, and as the first Governor of Bank Indonesia. Sjafruddin later became the prime minister of the Revolutionary Government of the Republic of Indonesia, a shadow government set up in opposition to the country's central government.
Originating from Banten with Minangkabau ancestry, Sjafruddin became active in politics after his education in law. By 1940, he was working at a tax office, and joined the nationalist movements during the Japanese occupation period (1942–1945). Due to his closeness to the revolutionary leader Sutan Sjahrir, he was appointed finance minister in the Republican government during the Indonesian National Revolution (1945–1949). In this capacity, he lobbied for and distributed the , a predecessor currency to the Indonesian rupiah. Despite his socialist views, he joined the Islamic Masyumi party. In December 1948, a Dutch offensive captured the Indonesian revolutionary leaders including President Sukarno, resulting in Sjafruddin activating contingency plans and forming the Emergency Government of the Republic of Indonesia on 22 December. For seven months in West Sumatra, he became the head of government of Indonesia, allowing the government to continue functioning and ensuring continued resistance.
Following the Roem–Van Roijen Agreement – which he had opposed – Sjafruddin returned his governing mandate to Sukarno in July 1949. With Indonesia now independent, he was first appointed deputy prime minister, then reappointed finance minister until 1951. One of the party's leaders and its most prominent economic policymaker, he maintained a conservative approach to government budgets and established a foreign exchange certificate system. In order to reduce the money supply and curb inflation, he formulated the "Sjafruddin Cut" policy which involves physically cutting Dutch-issued banknotes in half. He then became the first governor of Bank Indonesia, where his general accommodative approach to foreign capital and opposition to nationalization caused tensions with the Sukarno government and economists such as Sumitro Djojohadikusumo.
A pragmatic policymaker, he espoused religious socialism and based his views on a liberal Islamic interpretation and was a staunch opponent of communism. His opposition to Sukarno's Guided Democracy along with Dutch–Indonesian tensions caused a significant split between Sjafruddin and the Sukarno government. Escaping to Sumatra, he made contacts with dissident army officers and began openly criticizing the government. While initially reluctant to spark a civil war, in February 1958 he became leader of the Revolutionary Government of the Republic of Indonesia in West Sumatra. The rebellion was soon defeated, and after three years of guerrilla warfare Sjafruddin surrendered to the government in 1961. Imprisoned until 1966, once released he became a vocal critic of the New Order government for its corruption and imposition of the principle of Pancasila to religious and social organizations until his death in 1989. Despite opposition from the armed forces, he was declared a National Hero of Indonesia in 2011.
Early life and career
Sjafruddin was born in Anyer Kidul to an aristocratic santri family, in what is present day Serang Regency, Banten, on 28 February 1911. He was the son of a Bantenese father and a Bantenese-Minangkabau mother. His father, R. Arsyad Prawiraatmadja, was a district chief from a family of officials in Banten and was a member of the Sarekat Islam and Budi Utomo organizations. His maternal great-grandfather was a descendant of royalty in the Pagaruyung Kingdom, who had been exiled to Banten after the end of the Padri War. Sjafruddin began his education at a Europeesche Lagere School in Serang, before continuing to a Meer Uitgebreid Lager Onderwijs in Madiun. In 1931, he graduated from an Algemene Middelbare School in Bandung. He wished to continue his studies in Leiden in the Netherlands, but his family could not afford it, so he instead studied at law at the Rechts Hogeschool, in Batavia (now Jakarta), earning a Meester in de Rechten (Mr.) degree in September 1939. During his studies in Batavia, Sjafruddin founded the Unitas Studiosorum Indonesiensis, a student organization which was sponsored by the Dutch authorities and tended to avoid engaging in politics, unlike the more radical Perhimpoenan Peladjar-Peladjar Indonesia (Indonesian Students' Association).
After graduating, he became an editor for the newspaper Soeara Timur ("Eastern Voice"), and from 1940 until 1941 he was the chairman of the Perserikatan Perkumpulan Radio Ketimuran ("Eastern Radio Association"). Sjafruddin, who had developed strong nationalist sentiments, rejected the moderate demands presented by the 1936 Soetardjo Petition (made by Soetardjo Kartohadikusumo, the sponsor of Soeara Timur), and in 1940 refused to join the Stadswacht, the Dutch colonial militia. He also founded a war relief effort organization, where he served as secretary until the Japanese occupation of the Dutch East Indies began in 1942. Despite his education in law and his general interest in literature, he took a job at the colonial finance department as a tax inspector's adjutant in Kediri, after a one-year job training. He retained this job during the Japanese occupation of 1942–1945, during which he was initially promoted to head of the Kediri tax office, and then relocated to Bandung. During the occupation, Sjafruddin became convinced that immediate Indonesian independence was necessary, and became active in the underground independence movement. He often visited Sutan Sjahrir, a key leader in the resistance against Japanese occupation, and according to Sjafruddin, he was often wrongly regarded as a member of Sjahrir's movement. Along with Mohammad Natsir, he discreetly organized a number of educational courses directed against the Japanese occupation.
National revolution
Early national revolution
Indonesian independence was proclaimed on 17 August 1945, with Sukarno being elected as President. On 24 August Sjafruddin became a member of the Indonesian National Committee of the Priangan region, before joining the Central Indonesian National Committee (KNIP) and becoming one of the members of its Working Committee. In 1946 he joined Masjumi, an Islamic party, despite previously having no experience within Islamic organizations; he later said that his religious affiliation led him to prefer Masyumi to Sjahrir's Socialist Party of Indonesia, despite his personal connection to Sjahrir. His closeness to Sjahrir led to his appointment as deputy minister of finance in Sjahrir's second cabinet from 12 March to 2 October 1946 and Minister of Finance for his third cabinet from 2 October to 27 June 1947, before his replacement by Alexander Andries Maramis.
He returned to a cabinet position as Minister of Prosperity under Mohammad Hatta's non-party cabinet starting from 29 January 1948. Sjahrir had offered Sjafruddin a post as Minister of Finance in Sjahrir's first cabinet, but Sjafruddin rejected the offer, citing his perceived inexperience. In a later interview, Sjafruddin remarked that once he became Junior Minister and saw how his preceding Minister of Finance Soerachman Tjokroadisurjo worked, he thought he "[could do the Finance Minister's duties] better than that". Early in the revolution, he emphasized the need for revolutionaries to maintain a pragmatic stance. In a newspaper article, he criticized the Pemuda (youth) groups for pressuring the government with excessive demands, supported Sjahrir's realpolitik approach and praised Vladimir Lenin and Joseph Stalin as "realists" in contrast to the groups. The article came as a response to revolutionary armed forces commander Sudirman's speech which espoused militancy and downplayed the lack of equipment of the Indonesian military. In the same writing, Sjafruddin denounced a number of leaders who called for pemuda to fight Allied forces with bamboo spears as "criminal".
Sjafruddin also persuaded Hatta of the need to issue the Oeang Republik Indonesia (ORI), the predecessor to the modern Indonesian rupiah, both to finance the Indonesian government during the revolution and to generate a degree of legitimacy to the international community. When Hatta hesitated, Sjafruddin remarked to him that "if [Hatta] was caught by the Dutch he would be hanged not as a forger but as a rebel". In late 1946, he was the first Indonesian finance minister to distribute the ORI, although the signatures were that of Alexander Andries Maramis, who had organized its printing the previous year. In 1947, he participated in the Economic Council for Asia and the Far East at Manila, where he learned of the international impression that the Indonesian revolutionaries were communists. Once he returned, he published a booklet Politik dan Revolusi Kita (Our Politics and Revolution) in mid-1948 which attempted to clarify the unusual coalition between Masyumi and the Indonesian Communist Party (PKI). He also called for political parties to define a policy to ensure that each party's members would follow a specific party line.
Emergency government
By 1948, the Renville Agreement had established a ceasefire between the Dutch forces and the Republic. However, as the Dutch had previously conducted an offensive against the Republicans despite the Linggadjati Agreement, Indonesian leaders began forming a contingency plan. Following the advice of lieutenant colonel Daan Jahja, who considered the Republican power base in Central Java to be too small and densely populated for an emergency center of power, Hatta (at that time both minister of defence and vice president) began relocating a number of military and civilian officers to Bukittinggi beginning in May 1948. Then, in November, he brought Sjafruddin to Bukittinggi, and they began preparing the groundwork for an emergency government. Hatta then had to return to Yogyakarta to participate in United Nations-sponsored negotiations with the Dutch, leaving Sjafruddin to form an emergency government should Yogyakarta and other Republican leaders fall into Dutch hands. By mid-December, there were plans to evacuate Hatta back to Bukittinggi in order to allow him to lead the emergency government. However, before Hatta could leave Java, the second Dutch offensive was launched on 19 December. The Indonesian government in Yogyakarta fell the same day, with both Sukarno and Hatta being captured and exiled to Bangka.
After being informed of Yogyakarta's fall by Colonel , Sjafruddin was initially unable to believe that the Indonesian government would collapse so quickly and that both President Sukarno and Hatta had been captured. He was also initially uncertain of the authenticity of the news, and of his legal authority to form a government. With the fall of Yogyakarta, Sjafruddin convened a meeting with local Republican officials such as Teuku Muhammad Hasan and Mohammad Nasroen, but their meeting was cut short by Dutch aircraft flying low over the city. In order to evade the Dutch attacking Bukittinggi, he retreated further inland, towards the town of Halaban, where he was joined by a number of Republican officials and military leaders. There he eventually announced the formation of the Emergency Government of the Republic of Indonesia (PDRI) on 22 December, with himself as head.