Dutch forces in the Netherlands East Indies (NEI) were severely weakened by the defeat and occupation of the Netherlands by Nazi Germany, in 1940. The colony continued to operate as an independent Dutch state and tried stay neutral. The KNIL (Royal Netherlands Indies Army) was cut off from external Dutch assistance, except from Royal Netherlands Navy units. The KNIL, hastily and inadequately, attempted to transform itself into a modern military force trying to protect the Dutch East Indies from foreign invasion. Australian-Dutch cooperation had started in 1940. They lacked weapons, munition and transport. They had been worried about providing weapons to Indonesian military as they could be used against the Dutch in their fight for independence. As a result most were untrained as well. They were more of a police force and counted 31,000 staff in the 1930s with the aim to lift that to 40.000. However, they were no match to the well armed and highly trained Japanese. Furthermore there were the village police and militia who were also mobilised, but their equipment and training was basically non-existence.
With supplies from the Netherlands and Europe totally cut off the Dutch looked at Australia for supplies. However, Australia had a very limited war industry and also its steel industry war relatively small. Furthermore as, during the depression, factory upgrades and even maintenance had been delayed there was very little industrial capacity. While America was delivering new war planes, ships, etc the demand was such that Australia and the Netherlands often ended at the bottom of the list. However, Australia saw the strategic advantages of supporting the Dutch and trade deals were made to deliver oil, rubber and other raw materials in exchange for steel and other Australian products.
Military cooperation between Australia and NEI had started in 1940 but both countries were ill prepared, it was a case of too little, too late.
The KNIL air force, Militaire Luchtvaart KNIL (Royal Netherlands East Indies Airforce (ML-KNIL) numbered 389 planes of all types but was largely outclassed by superior Japanese planes.
The Royal Netherlands Navy Air Service, or MLD, also had significant forces in the NEI. After the NEI had declared war against Japan, they were no longer bound by neutrality and the navy rapidly started to work together with the British Navy.
One of the key reasons for Japan to invade the various European colonies in SE Asia was to get their hands on their rich resources. In NEI oil was the main target for the Japanese.
During a three months campaign during 1941–42, most of the KNIL and other Allied forces were defeated and taken prisoner, a relative few were able to flee to Australia. Many of the smaller – but also under resourced – units did fight to the bitter end. Others saw a rapid defeat as they were untrained or poorly trained and again under resourced. Very rapidly the locals donned their uniforms and fled to their own communities.
There was little incentive for the Indonesians to fight. Most hated the Dutch colonialists, as the Dutch had continuously suppressed any form of self-government, let alone independence. Many of the simple peasants (90% of the population) had no idea about the war that was raging on or about fascism and welcomed the invaders. That situation changed when the Japanese started to use many of the indigenous people more or less as slave labour and 2.4 million died as a result of exhaustion and even more so of starvation (all the food had to go to Japan) .
This last fact is little known as the headline information was only aimed at reporting Allied wins and losses. But many more Indonesians died than all of the deaths from the SWPC Allied forces and Dutch civilians combined.