U.S. Department of State
U.S. Department of State
Other State Department Archive SitesU.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
Home Issues & Press Travel & Business Countries Youth & Education Careers About State Video
 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Johnson Administration > Volume XXVI
Foreign Relations 1964-1968, Volume XXVI, Indonesia; Malaysia-Singapore; Philippines  
Released by the Office of the Historian


Documents 44-63

44. Memorandum From Michael V. Forrestal of the National Security Council Staff to the President's Special Assistant for National Security Affairs (Bundy)/1/

Washington, April 17, 1964.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. I, Memos, 11/63-4/64. Secret.

SUBJECT
Indonesia

I have asked Cuthell in the Department of State and Poats in the AID Agency to prepare recommendations from their departments to the President, through the NSC, with respect to our policy in Indonesia./2/ When Bill Bundy and the Secretary return, they will review these recommendations, so that we should be able to have a meeting on the subject late Wednesday or Thursday of next week./3/

/2/Apparent reference to Document 48.

/3/No record of this meeting has been found. Rusk's Appointment Book does not indicate that he met on Wednesday, April 22 or Thursday, April 23 to discuss Indonesia. (Johnson Library)

I have in mind two principal matters for the meeting:

1. The President's approval of a telegram to Jones (a working draft of which is attached/4/), giving Jones guidance with respect to Sukarno's anticipated visit to the World's Fair on May 16th and a brief visit to the White House.

/4/Attached, but not printed. The draft was sent as telegram 1163 to Djakarta, April 25, in which the Department stated that given the present atmosphere in the United States, President Johnson could not formally invite Sukarno to visit Washington in conjunction with his projected visit to the New York World's Fair. If Sukarno came to New York, the President would be prepared to receive him in Washington for a short, informal, and quiet visit on a time available basis. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 INDON) When Jones broached the question of the visit on April 29, Sukarno interrupted him to say that he appreciated the offer, but would not be able to come to the United States because of the uncertainties of the upcoming summit meeting on Malaysia. Sukarno subsequently designated Chaerul Saleh to represent Indonesia at the World's Fair. (Telegrams 1163 to Djakarta, April 25; 2248 from Djakarta, April 28; and 1187 to Djakarta, May 4; ibid.)

2. Consideration of the State/DOD/AID recommendations for continuance of limited assistance to Indonesia, subject to continuing review by the Secretaries of State and Defense in light of the diplomatic and military developments in the dispute between Malaysia and Indonesia. These recommendations will be supported by a political justification from State and a description of the current assistance programs to be prepared by Defense and AID.

I would expect that from the meeting would emerge a Record of Action, showing the President's approval of the recommendations, which would be classified, but would be drafted in such a way that it could be made available to the Congress in compliance with the Broomfield Amendment.

Mike

 

45. Telegram From the Department of State to the Embassy in Indonesia/1/

Washington, April 29, 1964, 6:38 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 32-1 INDON-MALAYSIA. Secret; Priority. Drafted by Ingraham, cleared by Cuthell, Green, and Buffum, and approved by William Bundy. Also sent to Kuala Lumpur and Manila and repeated to London, Canberra, Bangkok, CINCPAC, and USUN.

1175. With Malaysian elections out of way, next phase in efforts develop solution to Indo-Malaysia dispute presumably will involve maneuvers to convene early summit meeting. As Department understands picture, Sukarno is evincing increasing anxiety to firm up summit for early May, with Tokyo preferred site. Reasons his anxiety include desire start world tour culminating at World Fair, and probably his growing awareness things going badly for Indo in confrontation as well (burgeoning economic troubles, Tunku's election triumph,/2/ growing impatience with Indo shown by various Afro-Asians at Bandung II preparatory conference, Sulawesi dissidence, failure guerrilla-sabotage campaign weaken Malaysia, growing estrangement from West and drying up foreign aid, etc.). Macapagal, increasingly disenchanted with Sukarno and anxious score diplomatic triumph to hush internal critics, also strongly favors early summit and appears believe some as yet undefined basis for agreement at summit exists.

/2/In a memorandum to McGeorge Bundy, April 27, Forrestal noted that the Tunku's victory was a "landslide" and had elections been country-wide (i.e., including Singapore and Borneo) the Tunku would have had a clear majority. Forrestal hoped that the victory "will make the Tunku feel braver about meeting with Sukarno; but we do not intend to press for such a meeting ourselves." Forrestal noted that Macapagal was trying to organize another summit. (Johnson Library, National Security File, Country File, Malaysia, Vol. II, Memos, 4/64-7/64)

Tunku's attitude following unexpectedly decisive victory not yet clear. He may now regard his position as so strong he can afford meet Sukarno without fear repercussions at home. On other hand, confidence generated by victory plus fact he won it on hard anti-Indo platform may stiffen him against any accommodation with Sukarno.

We see number of risks in early summit, particularly in absence any real indications grounds for settlement exist (see separate telegram this subject). If any such grounds exist we inclined favor summit, since (a) as shown during Manila summit last summer, principals can display unexpected flexibility on occasion and (b) summit would at least provide conclusive test Sukarno intentions.

We do not, however, feel USG should play direct role in promoting summit, as Sukarno has requested we do (Djakarta's 2225)./3/ Latter appears as transparent maneuver designed generate US pressure on Tunku for early summit, put us in position of committing our prestige to its success, and avoid loss face and tactical disadvantage Indos fear they would accrue if they showed selves overly eager for summit by promoting it directly. Rather than play this sort of game, we believe our role should be limited to encouraging principals themselves to take necessary initiative.

/3/Dated April 22. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 3 MAPHILINDO)

In Sukarno's case, we think best tactic at this point would be to dispel any illusion that he can engineer summit painlessly by having us do work for him. This could bring him face to face with hard decision as to how much he prepared pay for summit, with world tour plans adding to his sense of urgency.

For Djakarta: Ambassador should see Sukarno, preferably in presence Subandrio, and draw on following points:

1. Department has considered his request USG explore possibility convening summit meeting and has decided we not in position do so. This decision based on number factors, including our continuing conviction Asians themselves must take initiative in solving their problems (as Sukarno himself constantly proclaims in public). We somewhat surprised, in fact, that Sukarno would ask us become involved in view prolonged GOI-encouraged anti-US campaign throughout Indo, in which alleged US interference Indo affairs has been constant theme.

2. If Sukarno truly interested in resuming negotiations, we urge him consider following: Major obstacle to progress in negotiations to date has been consistent Indo failure put forth concrete proposals or even make clear to others what they want. As one example, Subandrio April 7 offered provide Thanat with specific examples of what GOI meant by "pill-sweeteners" but to date we understand Thanat has received nothing. Same evasiveness and lack frankness apparent in Indo reaction to Lopez formula. If Sukarno now wishes determine Malaysian attitude to summit, he would lose nothing and gain respect by sounding out GOM openly, either through regularly established channel which both he and GOM have accepted, i.e., Thanat, or alternately through Macapagal.

3. Tunku, of course, is repeatedly on record that he will not attend summit while pistol pointed at head. Should not be unexpected if he now insists that guerrillas be out of Malaysia before agreeing to summit. Only way find out, however, is to make direct offer or inquiry.

4. Whatever Tunku's decision in matter, we would not consider urging him show greater flexibility on guerrilla question. As Sukarno aware, we have consistently maintained that continued presence guerrillas on Malaysian soil not only inexcusable on legal-moral grounds but entirely contrary Indo's own interests. So far these guerrillas have seriously tarnished Indo image before world; poisoned GOI friendship with US, Australia and other countries; cost Indo substantial foreign aid; helped Tunku win elections; and insured indefinite continuance British forces in area. Other side of ledger empty. As Sukarno should realize, Malaysia is stronger, not weaker, than before confrontation.

5. Assuming Sukarno will initiate new contacts with Malaysians, we hope he will be realistically aware of extent to which April 25 election has strengthened Tunku's position. No question that Indo confrontation was great help to Tunku. He ran on strong anti-Indo platform and Malaysian electorate overwhelmingly endorsed him. Any Indo attempt to assert that victory resulted from British intimidation certain to fall flat before world and damage Indo credibility, since election carried out in full view world press and foreign diplomatic community Kuala Lumpur. Rather than attempting challenge or downgrade results, which would make Indo laughing-stock, we hope Sukarno will be able see it as potential watershed in Indo-Malaysia relations and make real effort forget past excesses and come to terms with country which, whether he likes it or not, will be his neighbor indefinitely.

For Manila: Ambassador should see Macapagal, summarize substance Ambassador Jones' April 22 conversation with Sukarno (Djakarta's 2225) except numbered paragraphs one and five, and briefly outline foregoing five-point reply we intend make to Sukarno request for US initiative in convening early summit. Should note that completion Malaysian elections, coupled with recent relatively calm on Borneo border and Sukarno's desire for summit, suggests time approaching for new initiative to break Indo-Malaysian impasse. We know from Macapagal's comments during SEATO meeting that he has been giving matter good deal of thought, and we would appreciate his current views on situation.

For Kuala Lumpur: Whether there will be summit or other meetings depends largely on willingness of Tunku to participate. As stated paragraph two above we have no clear picture of his post-election attitude and we therefore need your opinion this subject soonest. In talking to Tunku suggest at this stage you avoid specific suggestions but attempt convince him that he should regard his new political strength as giving him ability to negotiate on basis any reasonable suggestion which may be produced by Phils, Thais or others.

Rusk

 

46. Telephone Conversation Between President Johnson and the President's Special Assistant for National Security Affairs (Bundy)/1/

Washington, May 1, 1964, 12:01 p.m.

/1/Source: Johnson Library, Telephone Recordings and Transcripts, Recording of a conversation between the President and McGeorge Bundy, Tape F64.26, Side A, PNO 1. No classification marking. This transcript was prepared by the Office of the Historian specifically for this volume.

[Here follows discussion unrelated to Indonesia.]

President Johnson [reading a newspaper account]: "Sukarno says he'll issue orders for action Sunday to a million Indonesians who volunteered to aid his efforts to crush Malaysia."

McGeorge Bundy: You'll be glad to know he's not coming to the U.S. right now.

LBJ [paraphrasing the newspaper account]: "In a May Day speech to 12,000, the President said the volunteers had been instructed to mass outside his place to hear his orders. Said foreign countries which intervene in Asian affairs are blamed for the continual trouble in the Far East. Said foreign countries, especially the United States, oppose him, and cited as proof the fact that American magazine, Whisper, printed a picture of him with a nude woman to show how bad I [Sukarno] am."

Bundy: Laughter.

LBJ: Never heard of Whisper.

Bundy: Never heard of Whisper. Laughter. Well, I think it's better for us to have him sounding off at a safe distance and the only question is how gradually we disengage, I think. We've still got that problem of that determination, hanging over us on that business, and we're trying to get it so that it will go to bed.

LBJ: Did we ever get a legal opinion on that?

Bundy: We have a legal opinion under which we're protected, but it's stretching a little thin. We've got another way of doing it, which is to get the NSC to advise you that we ought to go on where we are, and this, we think, would give you perfectly good political cover without engaging you in something you, yourself, would sign. I think we can do that, if you think that would be worth doing. You see, you're stuck between these two things now.

LBJ: Okay, all right, bye, do that!

 

47. Telegram From the Embassy in Indonesia to the Department of State/1/

Djakarta, May 9, 1964, 1540Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL INDON-US. Secret; Immediate; Limdis; Noforn. Repeated to Kuala Lumpur, Manila, Singapore, Bangkok, CINCPAC for POLAD, and Canberra. Passed to the White House.

2323. During nearly two-hour meeting with Sukarno and Subandrio at Bogor Palace today, tour d'horizon of where we stood on Malaysia issue, U.S.-Indo relations, aid to Indonesia, anti-American campaign and internal economic situation brought forth following major points:

1. Cancellation of U.S. Aid and U.S.-Indo Relations. After we had discussed new Philippine initiative re Malaysia, reported below, Subandrio said he wished to direct attention to whole question of relations between our two countries which he felt were approaching a new all time low. He referred to Bundy's threat to withdraw U.S. aid unless Indonesia changed its policy on Malaysia,/2/ said GOI would have to react strongly to this, suggested that perhaps in interest of both parties most satisfactory reaction would be for GOI to announce it would no longer accept any American assistance. This would relieve U.S. as well as GOI of irritant. His govt was being embarrassed by repeated U.S. official public statements designed to bring pressure on Indonesia. I was fully aware, he noted, of how sensitive Indonesians were on subject of being told what to do. If aid programs could not survive unless GOI changed its policy, perhaps best thing would be to cut it off now; relations between our two countries might be more harmonious without present small aid program than with it.

/2/William Bundy made this statement in a speech on May 5 to the Conference of the Advertising Council in Washington, and the speech was reported in The New York Times. Bundy stated that although the United States would like to help Indonesia economically, it was not able to do so. He continued, "We have been forced to cut back our aid programs very sharply and we may have to eliminate them entirely if Indonesia should continue a policy called confrontation against Malaysia--if it continues or is enlarged--to something that could only be characterized as aggression. That must be met." Bundy's full remarks relating to Indonesia are in telegram 1193 to Djakarta, May 5. (Ibid.) In a memorandum to William Bundy, May 8, Forrestal suggested that Bundy's remarks in the speech were not in the long-term interest of U.S. policy. (Johnson Library, National Security File, Files of Robert W. Komer, Indonesia, Nov. 63-Mar. 66 [3 of 3])

(As Embtel 2322 reported,/3/ I had been anticipating something of this sort and had tried to head it off by series of moves yesterday afternoon and last night. Moves did not go unnoticed; indeed Subandrio referred to Yani's inquiry.) I responded by saying that, as I had repeatedly made clear, I recognized that time might come when our aid program to Indonesia must come to a halt. However, I felt that now was not the time. I pointed out patience of USG in this matter in face of growing Congressional pressures and public opinion in U.S., and endeavored to convince them that Bundy statement was not to be interpreted as a threat but merely factual statement of situation which we faced. I said it would seem bad timing for either of us to cancel U.S. aid program on threshold of new Philippine initiative which might remove some of the difficulties we now faced. If we had any hope of summit meeting and peaceful settlement of Malaysian dispute, surely it was in Indo's interest to await outcome of these efforts. For our part, we were not contemplating any sudden step of this kind (I trust I was correct) because we sincerely desired peaceful settlement of dispute by Asian nations concerned and we had no intention of introducing new element which might add to current friction between us.

/3/Dated May 8. (National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) INDON)

Sukarno and Subandrio both reverted to Bundy statement and asked me direct question as to whether it represented, as they had concluded, major change of direction in U.S. policy. Bundy was new appointee, this was his first public statement, it had more than ordinary significance. People were saying it represented a new and harder line against Indonesia on part of new administration in Washington. Subandrio added that some of his Embassy people in Washington had asked to come home because they could no longer talk to people in Washington.

I replied that there had been no change in U.S. policy. Bundy was making informal speech before Advertising Club of NY. At same time, it must be recognized that Bundy was stating facts of life. I pointed out I had said same thing time and time again. It turned out it was not so much substance of Bundy remarks to which Indos objected as fact that they were made publicly. They hoisted me on my own petard by suggesting desirability of keeping comments of this sort in diplomatic channels. Subandrio referred to considerable improvement in Indo-Australian relations in past couple of weeks as result of fact that case was no longer being tried in newspapers. "This is a very difficult period for us," he said. "If we want to help U.S.-Indo relations on present level of friendship, it will help very much if your people will not make public threats against us."

I said I would relay this message to Washington but that there were two sides to this, and suggested anti-American campaign here might be tamped down. But in final analysis I thought best hope for improvement in relations lay in possibility of peaceful settlement of Malaysia dispute. So long as Indonesia appeared in role of aggressor, things would continue difficult. Many people in U.S. and elsewhere were convinced that Sukarno was engaged in a drive for territorial expansion and I suggested his actions had done little to dispel this suspicion. If peaceful settlement of Malaysia dispute were achieved as result of summit meeting, not only would Sukarno's image improve with this and accompanying withdrawal of his guerrillas but he would be able to concentrate on his increasingly serious economic problem with the possibility of renewed friendly assistance from outside world.

2. Economic Situation. Subandrio used above as springboard to charge that principal reason for GOI economic difficulties was failure of U.S. to fulfill its promises re balance of payments assistance. I took grim satisfaction in demolishing this accusation in Sukarno's presence for I am confident this was first time he had ever heard full story. Subandrio beat a hasty retreat after I had made clear way in which GOI had cut its own throat by trade blockade at critical moment in implementation of stabilization plan.

Sukarno then asked me what I meant by "increasingly serious economic problem." I outlined economic situation as we see it in simplest terms. He asked me if people were going hungry. I pointed out that so far as subsistence was concerned, situation was temporarily better with harvest of new rice crop. But I predicted that beginning October, Indonesia would face real economic and financial crisis unless steps were taken.

"Do you mean collapse" Sukarno asked. I told him I did not mean collapse because Indonesian economy was resilient and not that sophisticated--but I did mean real trouble. I outlined foreign exchange position of GOI, unsatisfactory exports, financial requirements for spare parts and raw materials, debt service and rice and demonstrated how GOI could not possibly make ends meet without outside assistance.

Subandrio said Indonesians had tightened their belts before and could do so again and he added that Pres Sukarno did not want to borrow money from outside. Sukarno looked black as a thundercloud during this exchange. He may have been angry with me or possibly as result sudden realization his people had never painted so dark a picture and might have been misleading him.

3. Malaysia Dispute. I opened conversation after usual pleasantries by reviewing U.S. position with respect to this subject, pointed out we continued (a) to favor tripartite meeting ending in summit, (b) to consider peaceful settlement vital to interests of all concerned as well as free world, (c) to feel strongly that any settlement to be successful must be reached by Asian nations concerned. Consequently, we welcomed new Philippine initiative and hoped that it would achieve success. I urged Sukarno and Subandrio to make every effort to help bring this initiative to successful conclusion and emphasized importance of keeping discussion in diplomatic channels.

It appeared that Sukarno had not been briefed by Subandrio re Lopez visit because ForMin picked up ball at that point and explained to Sukarno what I was talking about. Sukarno seemed pleased by news but immediately turned to me and asked whether I thought the Tunku would cooperate. He had had no indication from anyone, certainly not from press, that Tunku would come to summit. Both Tunku and Razak continued to make anti-Sukarno statements. I said I thought that Tunku would come to summit, provided all parties gave appearance of being reasonable and approaching meeting in spirit of good will. Withdrawal of Sukarno's guerrillas was an important element in establishing latter.

Sukarno again repeated his position had not changed. It was up to Tunku. Both he and Subandrio said they looked forward to visit of Lopez as special emissary from Macapagal.

4. ANZUS Treaty. Sukarno asked whether Bundy statement meant that U.S. was now defending Malaysia. I said if he meant by this militarily defending Malaysia, the answer of course was negative, although, I cautioned, escalation of the conflict could result in ANZUS Treaty being invoked. If he meant politically supporting Malaysia, he was aware that we recognized Malaysia and that we had welcomed its formation. But if he meant were we openly taking sides in Malaysia dispute, answer again was negative. Robert Kennedy had made amply clear that we considered solution of Malaysian dispute to be an Asian problem, that we were keeping hands off in the sense of attempting to dictate a formula, although we would do everything possible to help bring disputants to conference table. We were prepared to accept any solution upon which all parties to dispute agreed.

5. U.S. Press and Anti-American Campaign. Sukarno complained again about treatment by American press, said Soviet and Chinese press never did this to him, asked if there was not something Dean Rusk could do to tone down anti-Sukarno articles. I reminded him we have free press. I noted Chinese and Soviet press 100 percent controlled. He cited example of Adenauer who had called in certain editors and asked them not to vilify Sukarno, that they were hurting relations with Indonesia. I said I would pass on his comments but best remedy would be settlement of Malaysia dispute. I noted that I felt I had more right to complain to him of treatment in Indonesia where press was controlled, yet anti-American, anti-Jones articles were being published daily. I was not convinced these did not represent government policy or tactics. For example, I said, I was certain that resolutions by numerous organizations declaring me persona non grata would not have been passed and publicized without the specific blessing of the Foreign Minister. So long as these statements solely represented PKI opinion, I considered them compliment. But if they had the blessing of the govt, this was another matter. Subandrio was somewhat taken aback. Sukarno responded saying the day would never come when such actions would represent the opinion of the government.

Comment: Conversation, as foregoing report indicates, was full and frank, with occasional heated exchanges. I think net result was probably constructive.

As for Indo cancellation of U.S. aid, I believe we have headed that off for time being. I recommend that, so far as possible, we not exacerbate situation by further public statements on subject of aid withdrawal. Indos clearly recognize loss of aid as inevitable unless peaceful settlement of Malaysia dispute is achieved but it would be far preferable to let aid die natural death than to provoke Indos into pulling a Prince Sihanouk. PKI of course is calling for this action and I urge that we not play into their hands.

Jones

 

48. Memorandum From the Executive Secretary of the Department of State (Read) to the President's Special Assistant for National Security Affairs (Bundy)/1/

Washington, May 12, 1964.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. II, Cables and Memos, 6/64-8/64, [2 of 2]. Secret. No drafting information appears on the memorandum, but a covering memorandum to another copy indicates that the paper had "internal State and AID clearances" and Harriman and Bell approved its transmittal to the White House. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 32-1 INDON-MALAYSIA)

SUBJECT
Paper for NSC Discussion of Indonesia

Enclosed is a paper on Indonesia and the Indonesia-Malaysia dispute for consideration at the National Security Council meeting originally scheduled for May 12 and now scheduled for 12:30 p.m. Friday, May 15./2/ Should circumstances warrant, a brief supplemental paper covering last-minute developments will be submitted later. This paper makes the following salient points:

/2/Discussion of Indonesia at the NSC meeting of May 15 was canceled; see Foreign Relations, 1964-1968, vol. I, Document 156.

Indonesian guerrilla activity in Malaysian Borneo is continuing, although there has been a marked lull in recent weeks. Sukarno may be planning a substantial step-up shortly, however, to force the Tunku into an early summit meeting on Sukarno's terms. Sukarno's real intentions are not clear, but there is a possibility he actually wants a peaceful settlement. Both the Army and the PKI would probably oppose a settlement but it is unlikely that either could block it if Sukarno accepts it. Sukarno's terms for settlement have not been spelled out but probably include, as a minimum, some sort of pro-forma reascertainment of popular opinion toward Malaysia in Sabah and Sarawak which he could claim as a victory for internal consumption.

Internally Indonesia is in major difficulty. The economy is in bad shape and continues to deteriorate. A regional revolt in Sulawesi is causing additional strain. Neither, however, is likely to shake Sukarno's hold on the country.

We have been exerting diplomatic and (through aid) economic pressure on Sukarno to abandon confrontation and work out a peaceful settlement. The most promising current initiative has been taken by Macapagal, who has contacted Sukarno and the Tunku to urge an early summit meeting of the three.

No change is recommended in U.S. aid policy. We should continue to refrain from a formal Presidential Determination, at least until early June.

Benjamin H. Read

 

Attachment

Washington, May 9, 1964.

PAPER FOR CONSIDERATION AT THE NATIONAL SECURITY
COUNCIL MEETING, MAY 12, 1964

SUBJECT
Indonesia and the Indonesia-Malaysia Dispute

Situation

Indonesia is currently pursuing a two-sided policy in its dispute with Malaysia. On the one hand it is continuing its military, political and economic confrontation against Malaysia with the proclaimed objective of "crushing" the state. On the other hand Sukarno is asserting both publicly and privately his desire to settle the dispute peacefully.

Armed Indonesian-led guerrilla units are continuing their depredations in Malaysian Borneo, and Indonesian terrorists are continuing to operate in mainland Malaysia and Singapore. Estimates about a month ago showed some 4-600 Indonesian guerrillas in Malaysian Borneo and an indeterminate number of terrorists on the mainland. On both fronts, however, there has been a marked lull over the past few weeks. Reasons for the lull are unclear. It could have been brought about by the increased effectiveness of British-Malaysian countermeasures, by voluntary withdrawals for regrouping preparatory to further assaults, by a change in Indonesian tactics from hit-and-run moves to the establishment of permanent guerrilla pockets in remote areas, by a combination of the foregoing, or, conceivably, by an unadmitted change in Indonesian policy.

In the political field, Sukarno has been pushing for an early summit meeting with the Tunku and Macapagal without "preconditions" (i.e., the withdrawal of Indonesian guerrillas from Malaysian soil, which the Tunku has publicly insisted on before sitting down with Sukarno). He has, however, expressed his willingness to begin voluntary withdrawals simultaneously with the convening of a summit meeting or pre-summit ministerial meeting, obviously intending to control the pace of withdrawals as a bargaining counter.

There have been some recent indications that Sukarno, despite the serious risks involved, may be preparing for a substantial step-up in covert military activities in the near future as a means of frightening the Tunku into agreeing to an early and unconditional summit.

Indonesian Intentions

The sincerity of Sukarno's alleged desire for a peaceful settlement can be doubted but has not yet been fully tested. Conceivably his professed willingness to negotiate is no more than a blind behind which he is pursuing a calculated plan to dismember Malaysia and pick up the pieces. The British incline toward this estimate. We think it more likely, however, that--as far as Sukarno himself is concerned--his main goal is less that of bringing about Malaysia's downfall than that of avenging the fancied humiliation he suffered when Malaysia was formed and scoring what he can claim as a major diplomatic victory before the world.

The objectives of Foreign Minister Subandrio and Sukarno's other civilian advisers seem to consist of little more than getting Sukarno what he wants.

The Indonesian Army, however, appears to be genuinely obsessed with the long-range Chinese threat it professes to see in Malaysia and to be committed to a long, hard campaign to avert that threat by bringing Malaysia under Indonesian hegemony. It is doubtful that the Army would stand against Sukarno if he accepted a peaceful settlement, but it would probably accept the settlement reluctantly and might even continue, independent of Sukarno, a low-level campaign of subversion against Malaysia.

For entirely different reasons--basically a desire to bring about a complete break with the West--the PKI is totally committed to an anti-Malaysia policy, and will use all the influence it can muster to block a peaceful settlement.

Possible Settlement Terms

Assuming Sukarno honestly does want a settlement, the shape of a settlement acceptable to him is not clear--perhaps even to Sukarno himself. He is on record as (a) wanting separate "independence" for Sabah and Sarawak and for Singapore as well, (b) being willing to accept Malaysia as now constituted if the people of Sabah and Sarawak really want it, and (c) demanding the reascertainment in Sabah and Sarawak of popular opinion toward Malaysia to replace what he claims to have been the faulty UN ascertainment of September 1963.

Privately Foreign Minister Subandrio has indicated that Sukarno is willing to recognize Malaysia as a fact if he can be given a "pill sweetener" to erase the humiliation and permit him a victory for internal consumption. Subandrio has not, however, spelled out what an acceptable pill-sweetener would be--presumably it would have to be a device offering at least the form of, or substituting for, a reascertainment in Malaysian Borneo.

It is entirely possible that a summit meeting would not produce a firm agreement in concrete terms but would, at best, leave numerous ends dangling. In this event, the test would continue to be the actions taken by the parties, i.e., a reduction in guerrilla activity by the Indonesians and some form of ascertainment in Borneo on the part of the Malaysians.

Internal Developments in Indonesia

Internally the Sukarno regime is in major difficulty on a number of fronts, although its manifold problems have not yet reached the stage of seriously threatening its hold on the country.

The economy continues to deteriorate. Industrial output is declining in the face of severe shortages of imported parts and raw materials. Export earnings, hit by the confrontation against Malaysia, are insufficient to finance an adequate flow of imports, and the regime can no longer rely on foreign aid to fill the gap. Servicing of the huge foreign debt load may consume 40 percent or more of anticipated earnings, and defaulting on payments reportedly is already beginning.

Unable to feed itself or to finance adequate food imports, the country has suffered from severe food shortages in various areas over the past few months, which, although temporarily relieved by the April-May rice harvest, are expected to recur on a larger scale next fall. The regime has done little to counteract this rapid deterioration beyond exhorting the populace and introducing a few ineffective monetary measures.

Although Sukarno is notoriously indifferent to economics, there is no doubt that even he is dimly aware of the country's plight, and may be worried at its political implications. Other members of the hierarchy are clearly disturbed by it. At the same time, there are no signs that popular discontent over declining living standards has reached, or will soon reach, such proportions as to constitute a real danger to the regime.

In the security field, the regime is plagued by a fairly widespread regional revolt in Southwest Sulawesi and by a few scattered indications of unrest elsewhere (such as a recent series of army desertions in Sumatra). There is no evidence, however, that internal dissidence is likely to spread significantly as long as Sukarno keeps both the Army and the PKI tied to his regime.

In the context of its anti-Malaysia policy, the Sukarno government has permitted and apparently sometimes abetted a fairly intense propaganda campaign against the United States by the PKI, left-wing nationalists and the controlled press. A form of creeping nationalization is slowly squeezing British investment out of the country (with the major exception of Shell), and an increasing volume of threats are being leveled at American enterprises. On the other hand, despite signs of approaching trouble over certain financial provisions in the 1963 contracts, the foreign oil companies are currently enjoying generally satisfactory treatment by the government.

United States Position

We have made entirely clear to the Indonesians our lack of sympathy with their anti-Malaysia policy and our opposition to their use of force in pursuing that policy. The appreciable but limited leverage we have in Indonesia has been brought to bear on the Sukarno government in a continuing attempt to induce an abandonment of confrontation and the negotiation of a peaceful settlement. We have not tried to suggest the form such a settlement should take (although we have indirectly floated a few proposals) but have stressed to all parties that the formula for settling this Asian dispute must come from the Asians themselves.

Our pressure on the Indonesians has been exerted directly, both in the form of Ambassador Jones' continuing dialogue with Sukarno and Subandrio and through such wider efforts as the Attorney General's mission, Presidential messages, etc. It has been exerted indirectly by the progressive scaling down of our economic and military aid, which has contributed to the economic strain felt by the regime and has served graphically to demonstrate the growing estrangement that Indonesia's policies are forcing on us.

The success of our tactics has been mixed. We have not succeeded in ending confrontation, and we have brought about a heightening of the regime's anti-American orientation. Growing isolation from the United States has probably contributed somewhat to closer Indonesian ties with Communist China, although--significantly--not with the Soviet Union. On the other hand, our efforts have probably been the main contributing factor in bringing about such negotiations as have taken place and in keeping the door open for further negotiation. In addition, our efforts have probably been an important element in restraining the Indonesians from even more rash tactics.

Current United States Activities

Ambassador Jones is continuing to press our views on Sukarno at every opportunity. His current efforts are directed particularly at inducing the Indonesians (a) to enter into communications with the Malaysians through Thai diplomatic channels rather than relying on provocative public speeches to convey offers of resumed negotiations, and (b) to spell out for the other principals what they mean by "pill-sweeteners" rather than reiterating vague demands for reascertainment.

We are also encouraging Macapagal in his current effort to get negotiations restarted and have instructed Ambassador Martin to hold a thoroughgoing exchange with Thai Foreign Minister Thanat, with the idea of getting him ready to resume an active mediatory role if Macapagal's efforts succeed. As an alternative should these moves fail, we have asked our UN mission to sound out U Thanat on the possibility of his taking a more active part in the dispute if necessary.

Chaerul Saleh, Third Deputy Prime Minister and one of Sukarno's more influential advisers, is scheduled to visit Washington briefly during the period May 18-20. This will give us a further opportunity to present our views, and we intend to do so forcefully.

In the aid field, we have been bringing home to Nasution and the Army the fact that Indonesia's confrontation policy unavoidably affects our relations with the military as well as the civilian government, and disabusing them of the hope that close Indonesian Army ties with the Pentagon can be retained despite the cooling of other government-to-government relations. Continuing limited military, economic and technical aid is being kept under constant review to maintain psychological pressure on the regime and to insure that it adds nothing to Indonesia's confrontation capabilities.

In connection with our aid strategy, the question arises of the Presidential Determination called for by Section 620(j) of the Foreign Assistance Act. We are continuing to operate in Indonesia under a Presidential decision that the Determination be withheld pending the outcome of negotiations which would give us a clearer picture of Indonesia's intentions. Our programs are being carried on under a decision by the Attorney General that the President has a reasonable length of time in which to analyze the situation and frame his conclusions.

It may, however, be difficult to maintain this position to the end of the fiscal year, and we may well have to bring this matter to the President by early June.

Third Country Activities

The Philippines: Until the past few months the Philippine role in the dispute was not a helpful one. Inhibited by their own claim in Sabah, wary of offending their huge Indonesian neighbor and anxious to display a more "Asian" image, the Philippines were less of an independent third party to the dispute than a less-virulent junior partner of the Indonesians. This position has changed substantially since last February, however, as Macapagal has become increasingly disenchanted with Indonesia's rashness and intransigence. Macapagal has begun a rapprochement with Malaysia by moving to re-establish consular relations on May 18, and has told us that he will make one last all-out effort to bring about a peaceful settlement--failing which, he presumably will be prepared to part company with Sukarno.

Macapagal has already started this effort by sending messages to Sukarno and the Tunku proposing an early summit to be accompanied by guerrilla withdrawals. He intends to follow this up by sending former Foreign Secretary Lopez to both capitals during the week of May 10. The substance of Macapagal's proposals has not yet been fully spelled out, but among the measures he reportedly is considering is that of mediation by outside Asian powers.

The Tunku has already responded favorably to Macapagal's initiative. In a May 9 letter to President Johnson thanking him for a congratulatory message on the outcome of the recent elections, the Tunku stated that he agreed with Macapagal's terms for reopening talks but "with a slight change, i.e., as affecting the withdrawal of guerrillas".

Thailand: Thanat, despite a basic sympathy for Malaysia and impatience with Indonesia, played a most effective role as mediator during the two Bangkok ministerial meetings earlier this year and seems to have gained the confidence of all three parties. Although inactive during the prolonged impasse that has followed the second Bangkok meeting, he has continued to serve as a channel of communication between the disputants (particularly in the re-establishing of Malaysian-Philippine consular relations) and has expressed to us his willingness to take part in further negotiations.

The U.K.: The British have been Sukarno's main propaganda target since early in the dispute and have, of course, borne the brunt of the guerrilla fighting. Although not willing to foreclose entirely the possibility of a negotiated settlement, they have been particularly skeptical of Sukarno's intentions and have advocated a generally stiff line with him.

The British have frequently used their influence with the Tunku to urge moderation in his public statements, with mixed results. They have, however, been sensitive to any hint that they use their increasingly limited leverage in Kuala Lumpur to press for substantive Malaysian concessions in the interest of a settlement. In general, the British position has been a rather rigid one. While understandable under the circumstances, this position at times has unquestionably exacerbated the situation.

Butler's visit to Manila at the beginning of May, however, seems to have been accompanied by a noticeable shift toward greater flexibility, at least in Britain's public position. Butler endorsed the concept of an "Asian solution", actively encouraged Macapagal's initiative, and even indicated publicly--as far as we are aware, for the first time--that the U.K. has no objection to Maphilindo. On the other hand, shortly before the visit the British government authorized several new retaliatory measures against the guerrillas in Borneo, including limited hot pursuit into Indonesia. We are informed that these will begin after May 15.

The United Nations: There remains the question of a possible UN role in the dispute. Although the Secretary General's formal involvement ended with his report of the UN ascertainment in September 1963, he has continued periodically to express his interest in developments and has recently indicated his willingness to provide good offices. Apart from the Secretary General, there has been a rather unclear series of exchanges between the British and the Malaysians over the possibility of bringing the matter to the Security Council. The British have told us that they believe an approach to the UN should, for the present, be limited to the submission of Malaysia's case by letter to the Security Council President for information and distribution to members. There are, however, some indications that the British may have gone beyond this at one time by suggesting that the Malaysians seek Security Council action. Our latest information is that both sides are now agreed on an informational letter to the Security Council President and that the text is now being drafted.

We have engaged in informal contingency discussions in New York with the British, Australians and New Zealanders over a possible approach to the Security Council should the situation require it. The consensus has been, however, that the time for resort to the Security Council has not yet arrived.

Conclusion

At the moment, prospects for a summit meeting within the next month or less, perhaps preceded by lower-level talks, seem fairly bright. It is still an open question whether a summit can produce a formula for settlement acceptable to both sides, and indeed whether Sukarno really wants a settlement. Proposals which might lead to a settlement, however, are beginning to emerge (i.e., Afro-Asian mediation). In addition, the very act of attending a summit meeting has on past occasions instilled in the principals a greater flexibility than they normally display.

The dispute unquestionably remains a most serious one, and chances for a peaceful resolution are still very much in doubt. There does appear to be some promise in the situation, however. As long as it persists, our interests would seem to require that we continue our efforts to encourage current moves to convene a summit meeting.

 

49. Note From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk/1/

Washington, May 15, 1964.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 32-1 INDON-MALAYSIA. Secret. Attached, but not printed, was a draft memorandum to the President recommending that he invite Tunku to visit the United States, July 8-15. There is an indication on the note that Rusk saw it.

For your luncheon with the President/2/ I have the following points:

/2/The President met for lunch with McNamara, Rusk, Senator William Fulbright, and McGeorge Bundy at 1:20 p.m. (Johnson Library, President's Daily Diary) There is no indication in the President's Diary when the meeting ended, but Rusk's next appointment at the Department of State was at 2:38 p.m. (Ibid., Rusk Appointment Book) No other record of this meeting has been found.

1. Indonesia/Malaysia. a. Lopez hits Kuala Lumpur Saturday (tonight) and this is obviously virtually a make-or-break stage on the summit. Jones is urging a Presidential or Secretary statement of encouragement tomorrow (Lopez sees the Tunku Sunday afternoon). We clearly oppose a Presidential statement at this point, but it would be highly useful if you yourself were going to be holding a press conference today or tomorrow. Failing that, we would put a rather full statement out through the Department spokesman./3/

/3/Rusk did not hold a press conference on May 15 or 16 and no statement by the spokesman has been found.

b. We have in the White House a request for a Presidential invitation for the Tunku to come on an official visit in July after the Commonwealth Prime Ministers. If the President could agree to this (even without necessarily specifying dates) it would give Bell a superb handle to talk further to the Malaysians tomorrow--which he should do in any event--and would give a most useful fillip to the Malaysian state of mind at this point. I urge strongly that you try to clear this with the President at or around the luncheon./4/ I attach the paper as it went over./5/

/4/A note in the margin apparently in Bundy's hand reads: "Macapagal has scrubbed, so there is a hole he can move into."

/5/Attached, but not printed.

c. The Malaysians are definitely delaying their letter to the President of the SC until after the Lopez visit. I think they should be persuaded to hold off on it until we see finally whether or not the summit can be put together. We cabled you on this in The Hague, and it would be helpful to know whether you had a chance to talk with Butler. We would like to make the point to the British today and need to know the state of the bidding.

[Here follow 2 paragraphs on Vietnam.]

WPB

 

50. Telegram From the Department of State to the Embassy in Indonesia/1/

Washington, June 2, 1964, 8:21 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 32-1 INDON-MALAYSIA. Secret; Immediate; Limdis. Drafted by Cuthell, cleared by Green and Komer, and approved by Harriman.

1284. Embtel 2491./2/ As you know, US does not intend play any role in Tokyo meetings which hopefully will take place later this month, and does not wish create impression in anyone's mind that we are doing so. At same time, we regard these meetings as only foreseeable chance of real progress toward settling Indo-Malaysia dispute, and willing consider any related actions which might help create right atmosphere.

/2/In telegram 2491 from Djakarta, June 2, Jones suggested that "as an additional inducement for Sukarno to be reasonable at summit," the President should send him a message expressing hope for a peaceful settlement of the dispute with Malaysia and suggesting a date for a Sukarno visit to Washington. (Ibid.)

We are aware that visit to US is something Sukarno wants, that he has been aware adverse US public attitude toward GOI and that net result may be to make him more reasonable in Tokyo in hope successful US visit. We also aware Sukarno's capacity for backsliding after returning home in face PKI and other Indo domestic pressures, and for this reason we are reluctant to recommend to President that he give Sukarno written invitation to visit Washington.

Problem, therefore, is to help move Sukarno toward constructive attitude in Tokyo by holding out carrot of US visit without committing President to receive him as honored guest regardless of outcome of summit meetings. While situation might change if summit dramatically successful, suggest that for present you discuss with Sukarno along following lines:

As Sukarno knows, President regards resolution of dangerous problems in area by negotiation between Asian principals as essential, and hopes that summit meetings will make tangible progress. President also understands that Sukarno wishes make visit to World's Fair this year, and that he may come to US for this purpose after Tokyo. If he does so, US public reaction to events of past year will undoubtedly cause his public reception to be less friendly than on former visits. But if Sukarno does come, President would receive him in Washington for informal meeting before or after New York visit for discussion US-Indo relations and other problems of common interest. Temper of visit would of course depend on situation at the time. FYI. You should make clear that whole question of Washington phase of visit and to some extent nature of his reception will depend on outcome of talks in Tokyo.

We would anticipate that Washington visit would be handled as outlined paragraph two Deptel 1163./3/ We will suggest timing later. End FYI.

/3/In the second paragraph of telegram 1163 to Djakarta, April 25, the Department suggested that Sukarno's visit would have to be "short, informal, and quiet" and on a time available basis. The Department envisioned a stay of no more than 1-1/2 or 1 day with a working lunch. Although the Department might be willing to consider a brief communique at the conclusion of the visit, it could not imply U.S. patience with Sukarno's anti-Malaysia policies. (Ibid., POL 7 INDON)

Ball

 

51. Telegram From the Department of State to the Embassy in Indonesia/1/

Washington, June 24, 1964, 9:16 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 3 MAPHILINDO. Confidential; Priority. Drafted by Ingraham, cleared by Cuthell, Green, and Thomas M. Judd, Officer in Charge of United Kingdom Affairs, and cleared by Bundy. Also sent to Manila, Kuala Lumpur, London, and Canberra, and repeated to Tokyo, Bangkok, CINCPAC for POLAD, and USUN.

1366.

A. Assessment of Tokyo Maphilindo Summit:

1. In retrospect, Dept sees Tokyo summit as having produced very mixed result. Parties made no progress in halting military confrontation (immediate result, in fact, may be to intensify it dangerously) or otherwise bridging gap between Indo and Malaysian positions. Tokyo atmosphere also failed produce hoped-for diminution of mutual distrust and antipathy between Indo and Malaysian leadership. Instead, it sharpened them.

2. On other hand, summit did result in several potentially significant gains. While parties scarcely touched on thorny problem of political settlement--particularly Indo demand for Borneo reascertainment--they did reach agreement in principle on machinery to bring about political settlement (Afro-Asian conciliation commission) and on steps to set up machinery, i.e., further contacts between FonMins followed by another summit. This achievement admittedly a tenuous one, however, since Malaysians accepted commission proposal reluctantly and with little real faith in it.

3. Further achievement was clear emergence Macapagal and Lopez as genuinely impartial third party in eyes Indos and Malaysians. Both delegations indicated publicly and privately their faith in Phil bona fides. This achievement, however, somewhat clouded by Phil exasperation at Malaysians for their rigid position at summit and their "evasive" handling Phil Sabah claim in concurrent bilateral talks (Tokyo's 3867)./2/

/2/Dated June 20. (Ibid.)

B. Reasons for Impasse: 1. Controversy over relationship of guerrilla withdrawals to political settlement was crux of difficulty. Malaysian attitude throughout was one of injured righteousness which, although justified, tended to foreclose chances real progress. Understandably they concentrated almost exclusively on short-term goal of getting Indo forces off their soil and halting other forms confrontation. They refused recognize any direct connection between this objective and political settlement sought by Indos, seeing latter as Indo-contrived artificial issue to be disposed of after confrontation terminated. They could recognize hypothetical Sukarno need for face-saving device if he honestly wanted end confrontation, but they rejected basic premise that he wanted do so. In their view, what Sukarno wanted at most was brief pause to enable him prepare for renewed onslaught. This deep mistrust Indo motives led them to insist that elaborate minuet of verified withdrawal through designated checkpoints be carried to conclusion even after it had become clear that pressure of time was making it no more than farce; it prevented them from making any effort exploit Sukarno personality traits to their advantage as suggested in Djakarta's 2506;/3/ and, in final analysis, it kept them from making real test Sukarno intentions by failing offer him course of action which, in context his own prestige and his internal situation, he could reasonably be expected accept.

/3/Dated June 4. (Ibid.)

2. Contributing to impasse reached during final June 20 summit session was fact that Malaysian position throughout preceding week had been anything but clear and had left others unprepared for final rigidity. For example, during prolonged wrangle over checkpoints Malaysians made at least one concession--agreeing to first FonMin meeting before beginning of withdrawal--which suggested greater flexibility on Malaysian side than ultimately demonstrated. In this context, both US and UK observers noted signs of tension within Malaysian delegation, with Ghazali and other hard-liners ranged against others who seemed to favor more flexible position.

3. Indos contributed their bit to final impasse by poisoning already tense atmosphere with arrogant and meretricious press release June 14 (Tokyo's 3732),/4/ which hit Malaysians hard and sparked sporadic crossfire of public statements during rest of meeting. Aside from this, however, Indos handled selves fairly well and managed convey general impression they were genuinely seeking way out. (Malaysian EmbOff, however, told Dept that June 19 attack in Sarawak by guerrillas crossing from Indo had completely destroyed Malaysian hopes that Indos were sincere in their presummit undertakings.)

/4/The press release is summarized in telegram 3732 from Tokyo, June 14. (Ibid.)

4. As emphasized by Lopez (Tokyo's 3867), final and probably conclusive reason for impasse was that time ran out before real effort could be made to bridge gap between positions taken by Indos and Malaysians at June 20 afternoon session. Lopez expressed personal belief that, had he and Macapagal been given day or two to work on both sides, they could have hammered out acceptable compromise linking withdrawals to commission proposal. Alternately, had Malaysians made clear to Macapagal earlier in week that they intended demand end to confrontation before activation commission, Macapagal might have been able work out something. (Fact that they did not do so reinforces our suspicion that Malaysians did not actually decide on their position until last minute.)

C. Future Prospects:

1. Most immediate hazard is that Indos will respond to summit failure by promptly stepping up border warfare in Borneo and terrorism on mainland, reasoning that lull in hostilities in month preceding summit had made Malaysians overconfident and that what they now need is period of softening up before next round negotiations. (Press reports of major clash in Borneo this week suggests this has already begun.) British and Malaysians may respond with cross-border operations. Quite apart from obvious danger of escalation hostilities, Indo step up in military confrontation likely be taken by Malaysians as confirming their belief Indos have no intention seeking real settlement, thereby further dimming chances for negotiated settlement.

2. Since Malaysians have long had their eyes on UN and their initial position at Tokyo was to take issue to Security Council, there will undoubtedly be strong move in Kuala Lumpur to go to SC now, either in response increased Indo military activity or as result summit failure itself.

3. If above two obstacles to further negotiations can be surmounted--and chances not too promising--prospects for peaceful settlement might improve substantially now that device for settlement has been surfaced in Macapagal's commission proposal. While commission at first glance may seem little more than gimmick, it could prove good deal more in practice. Phils do not appear to see commission as quasi-judicial body, taking evidence and retiring from scene to draw up recommendations in isolation. Instead, it would operate as genuine conciliatory body, working out its recommendations through process of consultation and negotiations with both parties. It could, in effect, operate in same manner as did Lopez in hammering out May 27 summit agreement but with much greater authority. Commission could also play highly useful role in inducing both sides to exercise restraint while it seized with issue and could serve as channel of appeal by either side against mistreatment by other during this period. Moreover, commission would seem precisely that sort of device which Sukarno likely find most palatable as pill-sweetener, in that he could (a) make great point of bowing to its will as munificent contribution to Afro-Asian unity and (b) avoid giving any appearance giving in directly to "neo-colonialist" Malaysians.

Would appreciate post comments foregoing analysis./5/

/5/In telegram 21 from Djakarta, July 2, the Embassy suggested that Indonesian policy was aimed at a negotiated settlement as close as possible to its terms and without a withdrawal of its guerrillas. (Ibid.) In telegram 1317 from Kuala Lumpur, June 27, the Embassy suggested that Malaysia had accepted the commission proposal reluctantly and would only implement it if Indonesian military confrontation ceased. The Embassy did not accept that Malaysia was responsible for the impasse at the summit and suggested that Malaysia viewed withdrawal of Indonesia forces seriously. (Ibid.) In telegram 28 from Manila, July 4, the Embassy suggested that although it agreed with the assessment of what happened and why, the estimate of future prospects was wrong in certain respects. The Embassy suggested continued efforts at urging moderation, caution towards more summit or ministerial meetings, not becoming too closely identified with the Afro-Asian Commission, resolving the Philippine claim to Sabah with Malaysia first, and encouraging Malaysia to deal with the Borneo guerrillas on their own rather than relying completely on the British. (Ibid.)

Rusk

 

52. Memorandum From Secretary of State Rusk to President Johnson/1/

Washington, June 29, 1964.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. IX. Secret. The Department of State copy of this memorandum indicates it was drafted by Cuthell with clearances from Bell and Poats (AID), William Bundy, Harriman, Solbert (DOD/ISA), McNamara, and Arthur Wexler (H). (National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) INDON)

SUBJECT
Status Report on Relations with Indonesia

Recommendation: I recommend, with the concurrence of Secretary McNamara and AID Administrator Bell, that you approve continuation of carefully selected economic and military assistance to Indonesia, of the types now being provided, as originally approved in NSAM 278 of February 3, 1964./2/

/2/Document 29. There is no indication of the President's approval, but see Document 53.

Discussion:

1. The "Summit Meeting" of President Sukarno of Indonesia, Prime Minister Rahman of Malaysia, and President Macapagal of the Philippines took place in Tokyo recently. I believe the results represent limited progress and there is still a basis for further negotiation. The three heads of state agreed on a communique/3/ accepting in principle the designation of an "Afro-Asian Conciliation Commission" to assist the parties in resolving their differences. They also agreed to instruct their Foreign Ministers to continue to study the proposal for a conciliation commission with a view to a further meeting of the heads of Government.

/3/The text of the communique is printed in American Foreign Policy: Current Documents, 1964, pp. 898-899.

Personal relations between Sukarno and the Tunku were poor at the conference and both returned home issuing angry statements. We are apprehensive that the guerrilla activity in Borneo may now increase again. Our efforts and those of President Macapagal continue to be directed to attempts to restrain violent speech and action. Our effort will be to keep the attention of Sukarno and the Tunku focused on the fact that there is an agreement which must be carried out, starting with a meeting of the Foreign Ministers.

2. As you know, our limited programs of economic and MAP assistance with Indonesia have continued, in accordance with your decision recorded in NSAM 278 of February 3, 1964, pending the outcome of the "Summit Meeting." In my judgment, concurred in by the Secretary of Defense and the Administrator of AID, it is essential to the national interest to continue carefully selected economic and military assistance to Indonesia of the types now being provided. We should not, however, make a formal public announcement of continued assistance for this might give unwarranted encouragement to President Sukarno. If you approve the above recommendation, we will routinely and confidentially notify the Congress of the current status of assistance to Indonesia, as required by Section 620 (j), without reference to a renewed Presidential decision.

Dean Rusk

 

Enclosure

Paper Prepared by the Bureau of Far Eastern Affairs

Washington, June 22, 1964.

STATEMENT OF REASONS FOR CONTINUATION OF LIMITED
ASSISTANCE TO INDONESIA

Indonesia, in terms of size, natural resources and strategic location, is a key country of Asia. In the midst of a convulsive transition from the colonial past, it has become a major target of the Communist powers and is itself a source of tension in Southeast Asia. For the past nine months it has been pursuing a policy of political, economic and military "confrontation" against Malaysia.

Our Indonesia policy requirements are two-fold: (1) to halt Indonesia's "confrontation" against Malaysia and restore equilibrium to the area and (2) to influence the course of Indonesia's long-range development in a direction consistent with our security needs.

Our aid programs have been an essential tool in this dual task. Over the years, they have helped us keep open the communications between our two Governments and build up a limited but real leverage with the Sukarno regime, which we are using to prevent a dangerous drift away from the West. Although "confrontation" has not yet been abandoned, our influence has probably helped prevent greater deterioration and encouraged the Indonesian Government to join with Malaysia and the Philippines in seeking a peaceful settlement of their differences.

Those forms of assistance which could help Indonesia maintain "confrontation" against Malaysia have been eliminated, and we do not intend to resume them so long as "confrontation" continues.

The present AID program is limited to technical assistance, including civil leadership training and advisory services, malaria eradication assistance, and police training and equipment. (Arms and ammunition have been and are being withheld.) The present Military Assistance Program is limited to training in those categories which do not contribute to Indonesia's immediate offensive capability. The training is almost entirely confined to operations, logistics and administrative fields. However, no training is being provided in such fields as ranger, pathfinder, airborne, counter-insurgency, parachute packing, in-flight re- fueling, and landing force staff planning.

The reduced FY 1964 AID program totals approximately $10 million and the revised FY 1964 MAP is $1.9 million. All the FY 1964 MAP funds are for training; 90% of the FY 1964 AID funds are for training and malaria eradication. Similar programs at approximately the same level are planned for FY 1965. (See Tab B for details.)/4/

/4/Attached but not printed was a detailed description entitled "Current Assistance Programs in Indonesia," which had four tabs attached. Tab A was the proposed MAP and AID FY 1964 Program obligation, Tab B was reductions in FY 1964 MAP and AID program, Tab C was a pipeline trend of estimated unexpended balances of all obligations, and Tab D was an outline of the Food for Peace program in Indonesia.

We are currently training 490 civilian technicians, administrators and managers, and 170 military personnel (including 50 officers under the civic action program) who will play an important part in Indonesia's future leadership. In addition, U.S. university faculty teams in Indonesian institutions are reaching thousands of additional key Indonesians. Our training programs give us a unique opportunity to shape the thinking of Indonesia's future civilian police and military leaders. Continuation of the malaria eradication program, benefiting approximately 70,000,000 people of the central islands, is protecting an existing investment of some $36 million and would demonstrate our continuing concern for the Indonesian people. If we stopped now, malaria--now virtually eradicated in Java and Bali--would almost inevitably recur. The program of assisting the national police has given us valuable influence in this key organization (the country's first line of defense against internal subversion) and has greatly enhanced its effectiveness.

Continuation of these limited programs is essential to achievement of our policy objectives in Indonesia and to the national interest of the United States. Termination of the remaining programs would have little or no impact on Indonesia's capacity to continue "confrontation." The Indonesian Government would be likely to react to such termination by lashing out in anger, pushing "confrontation" harder, turning for help to the Communist powers, and further widening the gap between Indonesia and the West. In the process, substantial American oil and other private investment in Indonesia might well be expropriated.

All elements of these programs, including pipeline deliveries from previous years, as well as PL 480 programs (which are not controlled by Section 620 (j)), are being kept under continuing review.

 

53. National Security Action Memorandum No. 309/1/

Washington, July 6, 1964.

/1/Source: National Archives and Records Administration, RG 59, S/S-NSAM Files: Lot 72 D 316, NSAM 309. Secret.

FOR
The Secretary of State
The Secretary of Defense
The Administrator, Agency for International Development

SUBJECT
Presidential Determination--Aid to Indonesia

On the recommendation of the Secretary of State, the Secretary of Defense, and the Administrator of the Agency for International Development, the President has decided that no public determination with respect to aid to Indonesia should be made at this time, in view of the unsettled conditions in the South Pacific area. The limited programs, however, of economic and MAP assistance which have resulted from the reviews conducted by the Secretaries of State and Defense are essential to the national interest and are to continue. The Secretaries of State and Defense will report to the President on a quarterly basis the results of their continuing review of these programs.

McGeorge Bundy

 

54. Telegram From the Department of State to the Embassy in Indonesia/1/

Washington, July 11, 1964, 2:13 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 3 MAPHILINDO. Confidential. Drafted by Underhill, cleared by Cuthell, Harriman, and Green, and approved by William Bundy. Repeated to Kuala Lumpur, Manila, London, Canberra, and CINCPAC for POLAD.

35. Deptels action Djakarta 9, 10 refer./2/ After further consideration analysis and proposals contained reftels in light responses interested posts,/3/ believe you should focus in farewell call on Sukarno on effect on US-Indo relation of Malaysian dispute and eschew discussion Conciliation Commission, withdrawals, or other substantive aspects dispute itself. Sukarno should be left with impression we have no intention of advancing further suggestions, that we see problem and current impasse in lapse Asian principals. Main purpose your call should be convey deep sense personal and official concern over deteriorating trend US-Indo relations which far transcend quarrel with Malaysia. Same approach and theme should predominate in other farewell talks with Indo leaders and Phil Amb. Reyes if you see him.

/2/In telegrams 9 and 10 to Djakarta, both July 4, the Department suggested possible courses of action and presented its assessment of the positions of the parties in the wake of the Tokyo summit. (Both ibid.)

/3/The principal Embassy comments on telegrams 9 and 10 to Djakarta are in telegrams 70 from London, July 6; 34 from Kuala Lumpur, July 7; and 61 from Djakarta, July 8. (All ibid.)

Suggest your remarks to Sukarno follow following lines:

1) You depart with sense disappointment at inconclusive results Tokyo meeting and current impasse in efforts principals find peaceful solution Malaysian problem, but with even stronger conviction that this is Asian problem and that Asian nations involved can and must find way out.

2) More profound and vastly more disturbing however is effect of military confrontation on US-Indonesian relations. Since 1945, US and Indo have differed on occasion, often strongly, on variety of issues. Nevertheless a common dedication to basic ideals and principles embodied in Pantja Sila and Declaration Independence has stood above these differences preserving friendship and understanding and encouraging close US-Indo cooperation in wide range common efforts. Over past six months however Indos' policy re Malaysia has brought in its train progressively more serious deterioration in US-Indo relations, a trend which if unchecked could place basic fabric our relationship in jeopardy. This deterioration marked by series of actions of such evident hostility to US as to arouse doubts about Indonesian desires and intentions. To cite specific examples:

a. Intense and growing anti-US propaganda campaign throughout Indo, which obviously being carried on with Sukarno acquiescence. Not only has GOI allowed this campaign reach unprecedented levels but GOI leaders have directly contributed to it by participating in, and in some cases sponsoring, public functions at which US main target.

b. Apparent Indo decision abandon longstanding policy of non-involvement in Viet Nam issue (parting company, incidentally, with mainstream Afro-Asian attitude) in favor increasingly open support communist North Viet Nam and NLFSVN which is its agent. We can only take this as direct affront to US efforts defend South Viet Nam against external aggression--efforts which Sukarno must understand we are utterly determined pursue to successful conclusion.

c. Parallel Indo decision to place selves on communist side in Korea by recognizing Pyongyang regime. In this case, Indo not only offering affront to US but to UN as well.

d. Public statements by GOI leaders clearly portraying US as opponent Indo policies in Southeast Asia, such as Gen Yani's June 22 remarks (Djakarta's 2602) and Abdulgani's June 28 speech (Djakarta's 2638)./4/ FYI. Will leave to Ambassador whether cite these particular examples. We would not want undercut Yani's position by singling him out for criticism and same goes to lesser extent for Abdulgani. On other hand, might even help Yani a bit to express concern at his remarks. End FYI.

/4/Dated June 23 and 29. (Ibid., POL ASIA SE-INDON)

3) Malaysian problem and confrontation has also within US tarnished Indonesian image and made it progressively more difficult for Indonesia's friends in Government, Congress, the press, and public at large to understand and explain Indonesia's position. To Sukarno Indo case needs no justification. Indonesia's American friends, however, see South East Asia's only major power, dwarfing all neighbors in area, population, natural resources, military strength, resorting to military force in political dispute with small, militarily weak neighbor, leaving this neighbor no honorable recourse but to draw into dispute European power whose departure from area Indonesia, paradoxically, wishes to accelerate. No one admires a bully.

4) You leave Indonesia with heartfelt hope Sukarno, Tunku, Macapagal, with assistance Asian-African nations can find solution this problem which is poisoning Indo-US friendship. You may wish draw on perspective your ten years close association with Indonesia to observe US has been true friend Indonesia with no other objectives in association than those Sukarno has so often stated for his country: freedom, dignity, prosperity, peace./5/

/5/In telegram 94 from Djakarta, July 14, Jones reported on his final farewell talk with Sukarno in which Jones made all the points outlined in telegram 35 to Djakarta. Jones described the conversation as "whole unsatisfactory" with an impatient and irritable Sukarno countering every point made by Jones with criticism of the United States. Jones admitted that the meeting had been "discouraging and sobering." (Ibid., POL INDON-US)

Since objective would be to focus Sukarno's attention on US-Indo relations, we would like to avoid encouraging Thai or Phil efforts which might look like US-sponsored follow-up. We would like to give Sukarno and others a week or two to mull over your departing thoughts and speculate on your Moscow visit, and only then would plan approach Phils or Thai along roughly same lines and offer proposal contained Deptel 11./6/ Luns visit, Tunku's travels hopefully offer prospect brief hiatus for further Asian peacemaking efforts.

/6/Dated July 4. (Ibid., POL 3 MAPHILINDO)

Ball

 

55. Memorandum From Robert W. Komer of the National Security Council Staff to President Johnson/1/

Washington, July 17, 1964.

/1/Source: Johnson Library, National Security File, Country File, Malaysia, Vol. II, Memos, 4/64-7/64. Attached to this memorandum was a July 17 note from Komer to McGeorge Bundy in which Komer wrote: "Here's the Malaysia round-up I promised you, for weekend reading I presume. RWK." There is no indication that the President saw it.

Malaysia-Indonesia Dispute. For your background prior to the Tunku's visit next week, this pot is still simmering and could rapidly heat up.

So far we've managed (with help from Philippines and Thais) to keep it damped down by a series of time-buying maneuvers. But the long awaited Tokyo summit meeting in late June failed to bridge the gap. The Indos did pull out a few guerrillas from Malaysian Borneo, but they evaded full scale withdrawal. The one thing Tokyo did produce was acceptance--most reluctantly by the Malaysians--of Macapagal's proposal for the creation of a four-nation Afro-Asian conciliation commission. The Foreign Ministers are to meet in due course to study this proposal and to work toward another summit. This is a thin reed to lean on, but we're trying.

The Indos evidently anticipate a new Foreign Ministers' meeting in August. They've also suggested that the Thais re-inject themselves as an intermediary in place of the Filipinos. But Indonesian guerrillas continue sporadically active in Borneo, and an incident any time could wreck the chances of a meeting.

At present both parties are seeking to line up international support--the Tunku at the Commonwealth Prime Minister's Conference and next week in Washington, the Indonesians in Bangkok and Moscow. The Indos claim they're getting a lot more Soviet arms, but we suspect these may just be a speeding up of previous orders.

The big uncertainty is Indonesia's real intentions. Sukarno is heavily committed to "confrontation", both by his words and by pressures from the Indo Communists and the Army. Yet there is evidence that the results of "confrontation" have disappointed him to date, and that he might step back from over-commitment for the time being if a face-saving device could be found.

The Afro-Asian Conciliation Commission may well serve this purpose. Through the process of negotiation leading up to such a commission, and the inevitably lengthy process of conciliation by the commission, we could hope that hostilities would be kept damped down.

To keep the parties talking rather than fighting, we'll have to continue using the carrot and stick on both the Indonesians and the Malaysians (and their Commonwealth allies). This is no time to give the Indos many goodies, but we do want to keep dangling the prospect of renewed Western aid if Sukarno would only stop acting up.

It would be easy for us to join the UK in all-out support for Malaysia and to dare Sukarno to up the ante. This might scare off the Bung for now, but more likely just push him closer to Peking and Moscow and into more reliance on the Communists at home. Our aim is not just to turn off the jungle fighting in Borneo, but to do it in a way that doesn't lose Indonesia to us. Rather a neutralist Sukarno than a Communist running the country. So it still makes sense for us to lean over backwards (without sacrificing Malaysia), so long as there's even a reasonable chance that we can keep the lid from blowing off.

R.W. Komer

 

56. National Intelligence Estimate/1/

NIE 55-64

Washington, July 22, 1964.

/1/Source: Department of State, INR/EAP Files: Lot 90 D 165, NIE 55-64. Secret; Controlled Dissem. This estimate was prepared by the Central Intelligence Agency and the intelligence organizations of the Departments of State and Defense and NSA. All members of the U.S. Intelligence Board concurred with it on July 22 with the exception of the representatives of the FBI and AEC who abstained on the grounds that the topic was outside their jurisdiction.

PROSPECTS FOR INDONESIA

The Problem

To examine the major trends in Indonesia and to estimate probable developments, taking into account implications of the campaign against Malaysia./2/

/2/See also NIE 55-63, "Indonesia's International Orientation," dated April 10, 1963; and NIE 54/55-63, "The Malaysia-Indonesia Conflict," dated 30 October 1963. The judgments in both estimates remain essentially valid. [Footnote in the source text. NIE 55-63's essential conclusion was that Sukarno's "foreign policy actions are in some measure influenced by a desire to remain on good terms with both East and West." (Johnson Library, National Security File, National Security Estimates, 55, Indonesia) The summary portion of NIE 54/55-63 is printed in Foreign Relations, 1961-1963, vol. XXIII, Document 346.

Conclusions

A. President Sukarno remains virtually all-powerful in Indonesia and there is almost no chance that his rule or his policies will be effectively challenged by any group, movement, or individual during his lifetime. Neither increased economic stringency nor dissidence in the outer islands is likely to threaten Sukarno's position seriously. (Para. 3)

B. Over the past year Sukarno has tended to reinforce the position of the Indonesian Communist Party (PKI) and reduce the political influence of the military. Although PKI influence in the government remains relatively limited, it is likely to continue growing as long as Sukarno remains in power. Sukarno does not seek to establish PKI dominance but, over the long term, to fuse it with other radical and nationalist elements that he has slowly drawn into supporting his objectives. The PKI, well aware of his tactic, will probably continue ostensibly to support Sukarno, in the belief that in the long run the Communist cause will be the chief beneficiary of the economic, social, and political disarray he will bequeath to Indonesia. (Paras. 2-14)

C. Sukarno's campaign to disrupt Malaysia--"confrontation"--has helped accelerate the drift toward the radical left and will do so further if, as seems likely, the campaign continues. Sukarno will probably continue to seek to avoid open hostilities with British Commonwealth forces, because of the uncertainty of victory. A decisive trend in the struggle in South Vietnam, either way, would have some effect upon political forces in Indonesia and upon the pitch of the anti-Malaysia campaign. But, in any case, the mainsprings of Sukarno's foreign policy actions will continue to be found primarily in purely Indonesian considerations. (Paras. 1, 33, 36)

D. Confrontation has speeded the deterioration of the Indonesian economy. The most serious short-term problems are growing shortages of foodstuffs and other consumer necessities, and a heavy balance of payments deficit; prospects for improvement are not bright. The political impact has thus far been slight, but if food shortages persist, the problem of maintaining public order in urban areas could become serious. (Paras. 17-2)

E. These developments will probably not lead to any marked changes in Indonesian foreign policy over the next few years. Indonesia's growing cordiality with Communist China will probably continue, based on a near identity of short-term interests in the Afro-Asian world. The USSR, clearly disappointed by its failure to achieve predominant influence in Indonesia, even in the PKI, possesses only limited influence with Sukarno despite its vast military assistance to confrontation. (Paras. 34-35)

F. The road ahead for Indonesia is a troubled one of domestic deterioration, external aggression, and overall Communist profit. This prospect will not brighten until and unless Indonesia's energies are turned from foreign ambitions, which probably include Portuguese Timor and, in due course, the rest of New Guinea, and are devoted to the development of this potentially rich country. It is unlikely that such a shift will occur so long as Sukarno dominates Indonesia. (Para. 37)

[Here follows the Discussion section of the estimate.]

 

57. Memorandum of Conversation/1/

Washington, July 23, 1964, 5 p.m.

/1/Source: Johnson Library, National Security File, Country File, Malaysia, Vol. II. Secret. Drafted by Komer.

SUBJECT
President's Second Meeting with the Prime Minister of Malaysia/2/

/2/Johnson and Tunku Abdul Rahman met alone on July 22. No record of their conversation was made, but for a second-hand account of their meeting, see Document 265. In a memorandum to the President, July 23, Komer suggested that this meeting "seemed free of knotty problems." Komer thought that the Tunku's visit had been smooth, his mood was good, he was pleased with overt signs of U.S. support, but Komer feared that the Prime Minister was using his Washington visit as a platform for "tough anti-Indo talk." Komer suggested the problem was that the Tunku might get "too-cocky towards Sukarno because he thinks he's got us in his hip pocket." Komer suggested that the President emphasize to the Tunku the need for care and restraint in relations with Sukarno--"let the other guy make the mistakes"--lowering the rhetoric, mending fences with the Philippines, and not to let the Tunku think he has a "blank check" for U.S. credit sales and training. (Johnson Library, National Security File, Files of Robert W. Komer, Malaysia, Dec. 63-Mar 66)

PARTICIPANTS

Tunku Abdul Rahman, Prime Minister of Malaysia
Dato Ong Yoke Lin, Ambassador of Malaysia
Dato Muhammed Ghazali bin Shafie, Permanent Secretary for External Affairs

The President
William P. Bundy, Assistant Secretary of State for Far Eastern Affairs
James D. Bell, American Ambassador to Malaysia
R.W. Komer, the White House

The President greeted the Tunku warmly and asked him if he approved the communique. The President and the Tunku each read the draft communique/3/ after which each expressed approval.

/3/Printed in American Foreign Policy: Current Documents, 1964, pp. 899-900.

The President then told the Tunku that he hoped he returned to Malaysia with a clear sense of our support and admiration for him and for his country. The Tunku expressed his appreciation and thanks for all the kindness shown him on this visit.

The President reminded the Tunku of their conversation of July 22 about U.S. policy and said he hoped he understood our views. We thought it wise to be careful not to antagonize Sukarno unnecessarily. We applauded the Tunku's restraint and urged him to continue to play his statesmanlike role. Patience and restraint were important; "if we can be patient enough, the other fellow will make the errors". The Tunku nodded assent and indicated that he agreed with the President's position. The President then expressed his hope that Malaysia could solve its troubles with the Philippines. Dissension between Malaysia and the Philippines was only "water on the paddle of the Indonesian extremists."

We looked forward, the President indicated, to further talks in regard to Malaysia's desire for credits and military training. We would be glad to have the Malaysian Chief of Staff come here or to talk with other Malaysian defense people on this matter.

On the question of relations with the Philippines, the Tunku said, the Filipino attitude was disappointing. When he and Macapagal had met in Cambodia, the Tunku had asked the latter if there were any problems and suggested that these could easily be resolved. He was willing to let the Filipino claim go to a bilateral group, but the Filipinos didn't seem much interested in better relations. As the Tunku put it, "they were with us in the ASA but now they seem to take sides with Sukarno." This was a great disappointment. The Filipinos were unlike the Thais who had been with Malaysia from the beginning.

The President asked the Tunku about the riots in Singapore, saying that we had our own problems in New York. He hoped the Tunku was more successful than he had been in stopping this sort of trouble. The Prime Minister replied that the situation in Singapore was still tense. There had been three more deaths but the situation seemed to be quieting down. The President hoped the Tunku wouldn't have to cut his visit short and go back early. The Tunku said he was considering this but hoped to be able to go on to Canada.

As the meeting ended the Tunku invited the President to visit Malaysia at some early and convenient time.

 

58. Telegram From the Department of State to the Embassy in Thailand/1/

Washington, August 13, 1964, 5:46 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 32-1 INDON-MALAYSIA. Secret; Priority. Drafted by Underhill and Cuthell and approved by Green. Repeated to Manila, Djakarta, and Kuala Lumpur.

226. Depcirtel 252./2/ From replies to reftel/3/ following appears consensus on current status Malaysian dispute:

/2/In circular telegram 252, August 7, the Department presented its views on prospects for the Indon-Malaysian dispute. It believed that the Afro-Asian Conciliation Commission (AACC) must be pursued and not rejected by Malaysia. The basic obstacle to peace remained Indonesian guerrillas in East Malaysia and the Department suggested that the AACC might be able to convince Sukarno to withdraw them. Such a plan would require careful prearrangement and prior acceptance. (Ibid.)

/3/The major replies are in telegrams 165 from Bangkok, August 9; 150 from Kuala Lumpur, August 10; 273 from Manila, August 11; and 249 from Djakarta, August 11. (All ibid.)

1. Neither principal appears interested in continuing formal direct negotiations in absence clear exits from Tokyo impasse. Current level guerrilla activity is low, and Indos engaged in diplomatic activity to develop further support from Soviet Union, North Korea, and North Viet-Nam. GOM preoccupied with internal problems, and attention likely to be focused inward in first weeks following Tunku's return.

2. Thanat initiative for resort to salutary secret preparatory diplomacy appears best and perhaps only way to avoid creating in AACC another imposing but empty negotiating mechanism.

3. Phils are committed to publicized direct negotiations and, in view foregoing, their role for present essentially unconstructive. Macapagal and Lopez for personal and domestic political reasons appear determined however to pursue role of mediator and probably cannot be diverted.

Under circumstances Dept feels that, while approach outlined cirtel 252 as modified by posts' comments still valid, time for pursuing it does not seem to have arrived. Agree with Kuala Lumpur 150 that Thai participation in AACC is essential and therefore Phils must be committed to naming Thais as their rep on AACC before Malaysians announce choice Nigerians. Prior and secret Phil agreement is therefore necessary first step in implementing plan, but difficult to accomplish in context current Phil efforts. As Phils run up against GOI-GOM footdragging on resumption formal talks opportunity may then arise for essential Lopez-Thanat liaison. In absence such liaison Lopez likely conclude Thanat working against him.

For Bangkok: Department believes that at this stage best procedure would be for you to review current situation with Thanat, drawing on cirtel 252, Manila, Djakarta and Kuala Lumpur responses thereto, and this telegram in order ascertain Thanat's views. Would be preferable if you could do this before Thanat meets Razak, but would like to avoid having Thanat cite any ideas or problems raised as originating with USG. Request you emphasize importance some sort of liaison with Phils and suggest time may have come for Thanat to invite Lopez to Bangkok for strategy session. If Thanat prefers, we would undertake to tell Macapagal we believe his and Thanat's efforts should be coordinated, suggesting Macapagal send Lopez to Bangkok.

Rusk

 

59. Telegram From the Department of State to the Embassy in Indonesia/1/

Washington, August 17, 1964, 6:45 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL INDON-US. Confidential; Immediate. Drafted by Cuthell and approved by Green. Repeated to Kuala Lumpur.

174. Department gravely concerned by developments of past few days, specifically:

1. Landing of Indo troops in Malaya.

2. Sukarno's speech. As summarized your 312,/2/ speech contains little that is new, but is summary of current Indonesian view of world which is in conflict with our interests at almost every point.

/2/Sukarno's Independence Day speech of August 17. In telegram 312 from Djakarta, August 17, the Embassy suggested that "Sukarno went far toward denouncing the USG as main enemy of Indo revolution and aligning Indo psychologically with Asian Communist regimes." (Ibid., POL 15-1 INDON) For CIA and Embassy later assessments of the speech, see Document 62 and footnote 2 thereto.

3. Recent presumably PKI-organized actions against US private properties in fields rubber, petroleum and civil aviation.

4. Seizure Djogjakarta library./3/

/3/The Jefferson Library of the USIS in Djogjakarata was taken over by an anti-American mob on August 15.

On other hand we have also noted Indo temperance so far in reacting news Tower amendment/4/ and a few minor GOI actions such as granting permission for EmbOffs travel to West Irian.

/4/An amendment by Senator John Tower of Texas to the Foreign Assistance bill banning U.S. assistance to Indonesia and military training of Indonesian nationals in the United States. In a telephone call to Ball on August 17 at 5:45 p.m., President Johnson asked him to talk to Dirksen and Fulbright to see if the Tower amendment could be eliminated or made discretionary. (Johnson Library, Ball Papers, Telephone Conversations, Indonesia, [4/12/64-11/10/65])

Above numbered developments will obviously make much more difficult administration's efforts to secure modification or deletion of Tower amendment from aid bill. They also lead Department to wonder whether, either as conscious program or as result unwillingness face down PKI, GOI is in process making rapid readjustment in its foreign policy toward break with US. While we realize difficulty of doing so in present confused situation, Department urgently requests your views on present situation and where it is trending as well as any recommendations you may have on US actions to meet situation./5/

/5/See Document 63 for Galbraith's long-range assessment.

Rusk

 

60. Memorandum From the Deputy Assistant Secretary of State for Far Eastern Affairs (Green) to Secretary of State Rusk/1/

Washington, August 19, 1964.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) INDON. Secret. Drafted by Green and Cuthell.

SUBJECT
Your Lunch with the President Today/2/--Current Indonesian Developments

/2/President Johnson met with Rusk, Ball, Vance, and McGeorge Bundy at 1:33 p.m. in the White House. (Johnson Library, President's Daily Diary) No other record of this meeting has been found.

On the assumption that Indonesia is likely to be discussed at your lunch with the President, I thought it might be useful for you to have a brief summary of our current view of the situation, and my preliminary estimate as to how we may have to react to it. I must emphasize that these conclusions about future developments are still very tentative, and have not been cleared or discussed in detail outside this Bureau. I thought, however, you might wish to have them for your conversation with the President.

Sukarno's August 17 speech/3/ (full text not yet available) was a catalogue of specific points in Indonesian foreign policy in direct opposition to ours, and included lengthy sections on domestic affairs in which Sukarno set forth views identical with or very close to the PKI. During the period immediately preceding the speech various Indonesian groups with or without Government blessing seized our USIS Library in Djogjakarta, threatened take-overs or boycotts of several American private businesses, and increased the tempo of the current anti-American campaign. We assume that the stridency of the August 17 period will now give way to relative calm, but believe we are faced with an Indonesian Government which is increasingly moving away from the United States both internally and externally. That is also our Embassy's judgment.

/3/See footnote 2, Document 59.

During the same recent period we have had a new amendment on Indonesian aid passed by the Senate./4/ As we understand it, the present hope is that the final bill will contain the Tower amendment as written, further amended to give the President discretionary authority to continue such aid as he considers in the national interest. The practical effect of this would seem to be that shortly after the bill becomes law the President will be faced with the necessity of making a publicized formal determination on aid to Indonesia.

/4/See footnote 4, Document 59.

Bearing in mind both the difficulty of making a favorable determination in the light of Indonesia's recent conduct and the undesirability of giving Sukarno a pat on the back by doing so at this point, I am considering areas in which the current Indonesian program could be contracted, both to get the lesson home to Sukarno and to reduce pressures in the United States. Specifically I believe that the time may have come when we should terminate aid to Indonesian military and paramilitary organizations, but that we should attempt to maintain over the next years as much of a program of educational exchange and support for Indonesian educational institutions as we can. If possible, it would seem desirable to continue the Peace Corps program and the program for malaria eradication.

If the United States should announce termination of aid to the Indonesian military as a unilateral action we would expect a strong and perhaps violent Indonesian reaction. We would expect abrogation of the agreement protecting our oil properties and loss of other American investments, and would anticipate violence against Government installations and perhaps people, a situation which would obviously create a new major problem to us in Southeast Asia in the months ahead.

If we decide to terminate military aid we believe there is a good chance that we could exit with minimum adverse reaction from the present situation by pointing out to the Indonesians that the Tower amendment and their own policies are leading toward the ending of such aid, and suggesting to them that, in the interests of removing irritants to our relations, we agree to immediate termination of our military assistance program, and that the Indonesian Government issue an announcement to this effect. On the basis of discussions which Ambassador Jones had with Sukarno and Subandrio last spring we believe that the Indonesians might find this an attractive and face-saving approach to the problem. (Subandrio at that time spoke of such Indonesian action as a useful way of removing programs which were becoming irritations in our relations rather than contributing to them.) From our point of view, encouraging Indonesia to take this course would stand a better chance of relieving us of increasingly embarrassing programs without creating the long-range obstacle to the resumption of good relations with any Indonesian Government which would undoubtedly result from unilateral American action.

For the foregoing plan to work, it would be necessary to discuss the subject quietly with Sukarno and Subandrio soon, as the Indonesians would have to act before the aid bill becomes law. I plan, therefore, to make a detailed recommendation to you on this subject as soon as the status of the Tower amendment becomes more clear, but thought you might wish to go over the subject in general terms with the President.

 

61. Memorandum From Robert W. Komer of the National Security Council Staff to President Johnson/1/

Washington, August 19, 1964.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. II, Cables and Memos, 5/64-8/64, [2 of 2]. Secret.

The more we look at it, the more all of us working on Asia fear that Tower's amendment, even with discretionary language, not only puts you on the spot but moves us dangerously close to a final break with Indonesia. Sukarno's speech, irresponsible though it was, is a clear signal that he may have decided there's no hope of keeping open a bridge to us.

A. The foreign policy case for not giving Sukarno new grounds to react is a powerful one. We've strung him along for years (with our eyes open), on the basic premise that if he swung too far left we'd lose the third largest country in Asia--whose strategic location and 100 million people make it a far greater prize than Vietnam. To leave Sukarno no opening toward us multiplies the odds that he'll end up the prisoner of his powerful CP (largest in Free Asia and Peking-oriented).

B. Since Tower's language calls for immediately stopping all aid and training, he or others could press for an immediate determination under the discretionary language--thus putting on you the burden of going against the will of Congress (before the election). So it's worse than the Broomfield amendment, with which we've lived for many months. Though I passed word to Gaud and Ball that you left the issue to their judgment and that your main objective was to dispose of Tower, Ball had already moved to offer discretionary language to Fulbright and Dirksen. Rusk, Ball and Gaud apparently hesitate now to re-open the issue without a signal from you.

I'd argue, however, that we've met any obligation to Dirksen by State giving him the discretionary language, and that we could now try to kill Tower outright in conference. If not we could always retreat.

State/AID experts propose we quietly tell Indos pronto we're suspending all military aid (aside from completing the training of Indo officers already here--to send them packing would be an insult), and continuing only the minor AID technical assistance. Then we could clue conferees quietly that we've done most of what Congress wants, so please drop Tower amendment and not box you in./2/ I'd endorse this too. What's essential is not to force on you the impossible choice of either defying the will of Congress in an unpopular cause or letting the break with Indonesia move further to the point of no return.

/2/Ball telephoned Senator Everett Dirksen at 6:35 p.m. on August 18. Dirksen stated that discretionary language did not do any good. This was a "difficult parliamentary situation" and the Tower amendment could not be amended nor could it be vacated because of opposition. Dirksen talked to Fulbright and Mansfield and they thought it best to let it go to the House where "Tom Morgan and his boys would stand fast and take it." Dirksen said there would not be "too much ruckus from our side. There is a matter of pride." (Ibid., Ball Papers, Telephone Conversations, Indonesia, [4/12/64- 11/10/65])

R.W. Komer

 

62. Current Intelligence Memorandum/1/

OCI No. 2217/64

Washington, August 20, 1964.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. II, Cables and Memos, 5/64-8/64 [2 of 2]. Confidential. Prepared in the Office of Current Intelligence of the CIA.

SUBJECT
Sukarno's Independence Day Speech

1. Sukarno's independence day speech on 17 August explicitly confirms his accelerated swing to the left during the past 18 months./2/ It charts a course--both international and domestic--which is close to the immediate objectives of the Indonesian Communist Party. The speech precludes any real relaxation of the intensified anti-Americanism in Indonesia of the last few months. Although the anti-American campaign may ebb and flow to suit the purposes of Sukarno or the Communist Party, the long-range intent will remain unchanged: get the US out of Southeast Asia.

/2/In telegram 317 from Djakarta, August 18, the Embassy stated that Sukarno's speech "cannot be shrugged off as more of the same." As he had in previously prepared major speeches, Sukarno declared "Indonesia in the camp of Asian Communists and opposed to US--opposed not only on issues of the day like Vietnam and Malaysia, but fundamentally opposed to our thought, our influence and our leadership." (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15-1 INDON)

2. Sukarno declared that non-Asians must leave all of Asia, that South Korea and South Vietnam are "not yet free," and that Laos will be "truly neutral, united, and democratic" only if the imperialists withdraw their troops from the area. He announced that "we condemn as strongly as possible the American attack on North Vietnam." He castigated Malaysia intermittently throughout the speech, referring to it variously as a "barking dog," a "watchdog," and a "puppet" of imperialism.

3. Regarding relations with the United States, Sukarno said that despite repeated evidence of US Government hostility toward Indonesia over the years, he had tried to remain friendly toward America. US support of Malaysia, however, he said was "too much." The US was pretending to be friendly with both Indonesia and Malaysia; friendship with both, according to Sukarno, is impossible, and Indonesia will not accept such a pretense.

4. On the subject of cultural relations with the West and particularly with the US, Sukarno said he was no longer able to consider America the "center of an idea." He strongly criticized those Indonesians who copy Western ways and ridiculed Western efforts to influence Indonesia through libraries, films, and other forms of propaganda.

5. On foreign investment, Sukarno made it clear that American interests eventually would be taken over. "I wish to confirm that basically and eventually there will be no imperialist capital operating on Indonesian soil." He said British businesses will be completely taken over by the government and that compensation will depend upon the UK's stand toward the liquidation of Malaysia.

6. Regarding domestic policy, Sukarno emphasized that the "retooling" of reactionaries would be carried on at all levels without letup. He reiterated his long-standing concept of NASAKOM--the fusion of nationalist, religious, and Communist elements in Indonesian society and government--and said that whoever opposes NASAKOM opposes the Indonesian revolution. Sukarno endorsed the Communist concept of two stages of revolution, noting that the present bourgeois democratic stage would be succeeded in due course by a socialist stage.

7. He implied support of recent Communist land seizures, saying that the "unilateral action" of farmers was understandable in view of the slow implementation of land reform. He announced that land reform courts--a Communist demand--will be established. He lavished praise on North Korean agricultural successes and spoke of "freeing the productive power" of Indonesian villages--possibly pointing toward a plan for agricultural collectivism.

8. Sukarno did not indicate any specific moves against US interests in the immediate future. Considering the content of his speech, however, the seizure of the USIS library at Jogjakarta on 15 August was probably coordinated with Djakarta. Other threatened seizures have not materialized, nor have there been further demonstrations against US estates in North Sumatra. Rumored action against a US tire factory in Bogor, West Java, also has not developed. In both areas, the army and police have taken steps to protect American persons and property.

9. The Communist Party (PKI) moved immediately to identify itself with Sukarno's speech and to prepare to exploit it in furthering its own program wherever possible. A special statement by party chairman Aidit on 18 August welcomed the speech as "fully in line" with the struggle of the Indonesian and Southeast Asian peoples "at present." Aidit has instructed PKI provincial officials and party members to study the speech so that it may be used to "guide the Indonesian people in their activities."

10. The speech raises the question whether the position assumed by Sukarno is fully his own or whether it has been imposed upon him, at least in part, by the large and highly effective Communist Party. Over the years, the Sukarno-Communist relationship has appeared to be one of mutual exploitation. It seems highly unlikely that Sukarno has long been a Communist and is simply gradually surfacing his convictions now, but his predilection for Marxist patterns of thought, his spirit of opportunism, and his faith in his superb ability to manipulate individuals and groups may have carried him too far. It would appear at this time that Sukarno has deliberately chosen, on his own, to stand internationally with the anti-Western Asian world. Domestically, however, it seems likely that because he lacks administrative blueprints of his own and needs an effective organized political instrument, he has allowed too much influence to slip into Communist hands, and that he is well on his way to becoming a captive of the Communists.

 

63. Telegram From the Embassy in Indonesia to the Department of State/1/

Djakarta, August 24, 1967, 7 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 1 INDON-US. Top Secret; Immediate; Limited Distribution. Passed to the White House.

359. Deptel 188./2/ Following is my assessment and recommendations on Indonesia in light most recent events but with background Sukarno's words and their implementation in action over last 15 years. Admittedly crystal ball murky in this atmosphere but seems necessary try use it anyway.

/2/In telegram 188 to Djakarta, August 21, the Department informed Galbraith of the "high-level reappraisal of U.S. policy towards Indonesia with special reference to military assistance" and asked for his assessment. (Ibid.)

A. Assessment:

1. Although zigzag tactics Sukarno regime difficult predict the at least vague outlines of its course just ahead seems set and short-term effect on US official position here reasonably clear. US is in for harassment and trouble from PKI and other leftists and government will only half-heartedly apply brakes to them under best of circumstances we can expect. How far this will be allowed to affect operations under private American investment here, particularly in oil, not yet clear.

2. Malaysia, immediate cause rapid deterioration US-Indo relations over last year, is not subject meaningful settlement so long as Indos, as now, pursue negotiations as tactic to destroy Malaysia with objective dominating territory, under one pretext or another.

3. PKI will continue to spearhead confrontation against Malaysia and lead popular support for most other Sukarno causes. Its pressure on government in turn to espouse PKI causes will be unrelenting but so measured as to be at same time irresistible to Sukarno.

4. PNI under present leadership too sycophantic to other than follow Sukarno's lead. NU has weak leadership and organization and is unable do much but mute enthusiasm with which it says "me too" to Sukarno. Other parties either inconsequential or subject Sukarno's manipulation or both.

5. Army will try to keep its unity and its correct attitude vis-a-vis Sukarno. Pressures on army leadership for conformity will increase, however, and its strength and unity of purpose under non-Communist leadership will inevitably erode. Army will try to salvage as much as it can in way training and keep its special relations with US military but this is likely to be reduced soon to trickle or hiatus. Air force and navy have virtually written off US assistance.

6. Indonesia's domestic and foreign posture will be dominated by Sukarno's growing megalomania. And whether as result decision made long ago by him or as consequence his predilection for and training in revolution, Sukarno will lead Indonesia in way which will strengthen hand PKI and take Indonesia further into Communist camp.

7. Sukarno will continue his drive for Asian-African leadership generally through espousing anti-imperialism, etc. and particularly through promoting as many A-A conferences as possible here in Indonesia. He will also make special effort to exert leadership with North Korea, North Vietnam and Cambodia and this will lead him to beat anti-US drum and echo Peking. Conscious of Indo reliance on Soviets for arms and other support, Indonesia will point effort to effect reconciliation of USSR and CPR.

8. Sukarno and his closest advisers like Subandrio speak of passing through stages of revolution advancing to socialism (communism). Although this process has at times appeared and now appears to be moving rapidly, it has actually not gone very far. Army, most of governing class (despite heavy Communist influence some Ministries such as Basic Education, Information, Sports and Justice), larger part of Moslem, mainly peasant population, is still unprepared and "revolutionary" changes remain largely at verbal level or confined to central authorities Djakarta. PKI still has much to do, as party itself seems aware (FND 7069)/3/ although PKI dedication, energy and drive and financial backing should not be underestimated.

/3/Not further identified.

9. Drive by Sukarno to take Indonesia into Socialist camp is therefore race by him with Father Time in which odds are against Sukarno. Sukarno's fellow revolutionaries have been dying off fast last few years. New generation is coming on fast. Many of them can be counted on to put their educations to work on Indonesia's real problems of sagging economy and social backwardness, if and when they get the chance. Need for US aid would then be magnet drawing them toward us.

10. There is much discontent with economic waste and corruption and with Sukarno's arbitrary disposition of Indonesia's financial resources on his pet projects. Price of rice has reportedly doubled since Aug 17 speech. Sukarno's rice policy could well be his Achilles heel with hitherto compliant population. There is some dissidence and potential dissidence in outer islands like Sulawesi and Sumatra. However, leadership and organization to make discontent and dissidence effective in revolt is much less strong than in 1958. There is some stirring in NU and among what is left of Masjumi but it is still too inchoate to be meaningful.

11. Although Sukarno's bluster gives verbal aid and comfort to enemies of US in Far East, Indonesia has little real power to put in balance. It will tie down some British and perhaps eventually Australian and New Zealand forces but will itself be tied down in process.

B. Recommendations:

1. In anticipation further deterioration US-Indo relations US should reduce American presence subject to harassment here. It may actually relieve situation to close out some less meaningful projects. Specifically, where AID and MILTAG projects are completed or when Indonesians request US to end them, we should repatriate personnel with least possible fanfare and publicity.

2. On basis foregoing, Congress should be persuaded not to include in AID bill any additional restrictions on US aid to Indonesia to that contained in Presidential determination provision.

3. To extent possible maintain those aid, civic action and military and police assistance programs meaningful in terms of continuing contact and future influence. Keeping our commitments on some non-tactical items equipment will almost certainly be necessary to accommodate this.

4. On short notice be prepared to respond to emergency requests by responsible Indonesian leaders for food, riot control equipment and internal security items. This might entail stockpiling in areas close by such as Philippines and/or Australia.

5. By covert and overt means increase volume and effectiveness with which US version world events is provided Indonesians (this will require injection funds and people--this is field where US has been losing heaviest to ChiComs, Soviets and PKI).

6. Avoid insofar as possible communication to press, American or foreign, that any particular changes taking place in our policy toward Indonesia. Our public posture should be as in past: (a) continue ongoing programs as possible, (b) avoid taking position on substance Malaysian dispute, (c) oppose use of force to settle Malaysian disputes, (d) desire by US maintain friendship both Indonesia and Malaysia.

7. Keep contact open with NU and other elements opposed to Sukarno's anti-US policies ([less than 1 line of source text not declassified] I am preparing assessment these contacts which will send shortly).

8. Be alert to development potential for meaningful dissidence, especially in outer islands and West Java, and be prepared move rapidly in support army should Sukarno-PKI pressures on army leaders or other occurrences precipitate army revolt against Sukarno.

To extent Department finds any above suggestions helpful, Embassy will submit detailed recommendation.

Galbraith

Volume XXVI Index


  Back to top

U.S. Department of State
USA.govU.S. Department of StateUpdates  |   Frequent Questions  |   Contact Us  |   Email this Page  |   Subject Index  |   Search
The Office of Electronic Information, Bureau of Public Affairs, manages this site as a portal for information from the U.S. State Department. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein.
About state.gov  |   Privacy Notice  |   FOIA  |   Copyright Information  |   Other U.S. Government Information

Published by the U.S. Department of State Website at http://www.state.gov maintained by the Bureau of Public Affairs.