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 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 184-205

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

Washington, December 16, 1965, 5:15 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON. Secret; Immediate; Exdis. Drafted by Berger and approved by William Bundy. Repeated to Tokyo, Bonn, and CINCPAC for POLAD.

777. Ref: Djakarta's 1780 rptd addressees./2/

/2/In telegram 1780 from Djakarta, December 15, the Embassy reported on discussions with the German and Japanese Ambassadors in Indonesia about requests for economic assistance from North American Director Helmi of the Indonesia Foreign Office on behalf of the Army. (Ibid.)

1. Appears from here that Indonesian military leaders' campaign to destroy PKI is moving fairly swiftly and smoothly, that Subandrio's days numbered,/3/ and that Sukarno might be travelling abroad before long giving military even freer hand to develop and install new govt. May well be that these developments will move so rapidly that we may be confronted within weeks with situation we have hoped for, i.e. a new govt, emerging or in being, that we can begin to talk to and deal with.

/3/In Intelligence Memorandum OCI No. 3164/65, December 13, the Office of Current Intelligence of the Central Intelligence Agency provided background on Subandrio and suggested that he was "a barometer of the President's relations with the army. If Sukarno feels that he is not strong enough to resist army pressure, Subandrio is likely to be removed from Indonesian political life. If he continues to survive in office, this may be a sign that the President feels he can out-wait and out-maneuver the army leadership." (Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65-5/66)

2. As you indicated in para 5 reftel, Japan and Germany are in best position to offer early assistance. In these circumstances would like your views on feasibility (from point of view of exposure) and desirability of you, Saito and Wertz meeting informally together as required to concert on tactics and strategy and block out suggested lines of action for the three countries and possibly others. If idea commends itself to you, we would make this suggestion formally to Japan and Germany. We would, of course, inform UK, Australia and New Zealand of foregoing and keep them clued in.

Ball

 

185. Editorial Note

The question of the role the U.S. Embassy in Indonesia in compiling and providing lists of Partai Komunis Indonesia (PKI) members to anti-Communists and Indonesian military authorities has been the subject of controversy. In 1990 a journalist interviewed Robert J. Martens, political officer in the Embassy, and then published an article, "U.S. Officials' Lists Aided Indonesia Bloodbath in 60's." (The Washington Post, May 21, 1990) Martens sent a letter to the editor of The Washington Post on June 2, 1990, in which he stated: "It is true that I passed names of the PKI leaders and senior cadre system to non-Communist forces during the six months of chaos between the so-called coup and the ultimate downfall of Sukarno." Martens continued, "the real point, however, is that the names I gave were based entirely--I repeat entirely--on the Indonesia Communist press and were available to everyone. This was a senior cadre system of the PKI--a few thousand at most out of the 3.5 million claimed party members." Martens stressed that these lists of PKI members were "not party rank and file." Martens also stated categorically in his letter that, "I and I alone decided to pass those 'lists' to the non-Communist forces. I neither sought nor was given permission to do so by Ambassador Marshall Green or any other embassy official." Martens concluded with the statement that he did not turn over classified information nor was he the head of an Embassy group that spent 2 years compiling the lists as stated in the article in The Washington Post. He stated that there was no such group.

Between December 17, 1965, and August 10, 1966, the Embassy sent the Department three airgrams listing PKI members. On December 17, 1965, the U.S. Embassy in Djakarta transmitted to the Department airgram A-398 that contained as enclosures lists of the PKI leadership and a compilation on the fate of PKI leaders. The airgram was drafted by Martens who informed the Department that the Embassy had received a number of reports concerning the arrests of prominent PKI leaders, often based on suspect evidence. Martens also cautioned that there was widespread falsification of documents, such as "alleged confessions some of which can be easily detected and some not." He then explained that enclosed in the airgram were two lists. The first was an unclassified list of the PKI leadership bodies (Politburo, Central Committee, Central Control Commission, Central Verification Commission, and Secretariat Central Committee-PKI) with the names of their members as they existed in May 1965. The second enclosure was a "fragmentary compilation on the present whereabouts of PKI leaders based on limited information available." The May 1965 list contained 95 PKI positions (comprising only 67 individuals since PKI members often had multiple positions and one official was identified by two different names). The second list described the whereabouts of 18 PKI leaders of which all but 2 were either dead, arrested, or believed to be arrested. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 12 INDON)

On March 11, 1966, the Embassy sent the Department airgram A-564 which was drafted by Martens and signed by Edward Masters and contained as an enclosure an update on the fate of PKI leadership from the Central Committee, Central Control Commission, Central Verification Commission and Heads of Provincial PKI Organizations who were not members of the Central Committee. The airgram indicated that information on PKI officials "remains extremely fragmentary but sufficient additional information has been received to make a new compilation advisable." The enclosure was a list of 80 PKI leaders and their status. (Ibid., RG 84, Djakarta Embassy Files: Lot 69 F 42, POL 12 PKI)

On August 10, 1966, Ambassador Green sent airgram A-74 to the Department, drafted by Marten and approved by Masters, which provided as an enclosure another update of the fate of PKI leaders. Airgram A-74 provided new information available since March 1966 on 15 senior PKI figures and listed 4 senior PKI officials reported dead and 20 reported imprisoned. This airgram, which was signed by Green, indicated that: "A sanitized [ie. Embassy attribution removed] version of the lists in A-398 has been made available to the Indonesian Government last December [1965] and is apparently being used by Indonesian security authorities who seem to lack even the simplest overt information on PKI leadership at the time (lists of other officials in the PKI affiliates, Partindo and Baperki were also provided to GOI officials at their request)." (Ibid., RG 59, Central Files 1964-66, POL 12 INDON) Partindo was a small left wing party that was closely allied with larger and more influential Baperki, an association of Indonesians of Chinese descent.

 

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

Djakarta, December 22, 1965, 1250Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON. Secret; Priority. Repeated to Bangkok, Canberra, CINCPAC for POLAD, Department of Defense, Kuala Lumpur, Hong Kong, London, Manila, Medan, Paris for NATUS, Singapore, Tokyo, and Wellington.

1843. Reference: A. Embtel 1515. Reference: B. Embtel 1519./2/

/2/In telegrams 1515 and 1519, both November 20, the Embassy assessed the struggle between the pro-Sukarno leftists forces and the Army/non-Communist civilians and suggested that while clear cut predictions were difficult to make, the unresolved political situation meant that regionalism was reasserting itself in Indonesia to the detriment of both Sukarno and the Army. (Both ibid.)

1. Indo politics has continued to move in "right" direction since our last assessment (reftels). PKI is no longer a significant political force, and Djakarta-Peking axis is in tatters. Meanwhile, army has gained in political experience and has further consolidated its position. Most notable change, however, has been further weakening of Sukarno's prestige and marked failure of his mid-November bid to get full authority back in his own hands. This failure has opened real possibility of far-reaching changes in local power structure during next few months, but many problems and hazards remain.

2. Indonesia is now in midst of basic political revolution. Final outlines this revolution still obscure, and there will almost certainly be slippage from time to time, but we do not believe Sukarno/Subandrio can reverse present trend. Following significant developments underlie this interpretation:

A. Sukarno's image is tarnished. From all sides we hear comment that he will no longer be decisive political factor in future. Even newspaper editorials and corner columns are beginning to snipe at his hitherto sacred image. Sukarno's dogged adherence to his discredited slogans and in particular to his insistence on continuing Communist role in Indo society and Indo alliance with Asian Communist regimes has furthered public disillusion. Meanwhile army leaders and others are ignoring his admonitions to extent which inconceivable three months ago.

B. Subandrio has been stripped of much of his authority. Even though earlier army hope to force him out before now has not materialized, Subandrio has lost ground. His intelligence agency (BPI) has been taken out of his hands and placed under army-dominated supreme operations command (KOTI). He has been smoothly eliminated from top leadership position in KOTI at time when that body apparently being groomed as real power center. Even within Foreign Ministry, there large faction headed by his first deputy (Suwito) which not loyal to him.

C. KOTI has developed into potential rival government. Existing cabinet (105 portfolios) must eventually be changed into more efficient governmental tool. Appointment of Nasution, Sultan Hamengku Buwon, and Ruslan Abdulgani as Deputy Supreme Commanders of KOTI, with authority over military, economic, and political affairs, seems first step in this process and virtually creates rival to Sukarno's presidium and cabinet. Below the three KOTI deputies command structures are being created reaching into every sphere of governmental activity.

D. Army's internal position is stronger. Military cohesion has tightened to extent Nasution/Suharto can now expect loyalty most key commanders in any showdown. Efforts by Sukarno to shunt aside anti-Communist military leaders have flopped, and army has retained effective urban as well as rural control despite indications month ago that control might be slipping in cities.

E. Moderates seem about to regain control of Nationalist Party (8). Sukarno support for party's radical left wing has had little effect in saving Ali/Surachman leadership. This further evidence of major shift in locus of power which has taken place.

F. Old foreign policy has been discredited. Indonesia's close alignment with Communist China is shattered. Even confrontation with Malaysia is beginning to respond to new atmosphere and we aware of as little support outside immediate Sukarno entourage for lengthy pursuit of this ill-conceived policy.

G. Indos are starting to do normal business with us again. It is apparent that high level decision has been made to clean up old problems between FonDep and Embassy. Yesterday Embassy received payment for damage to Medan and Surabaya Consulates by demonstrators earlier this year. This first reimbursement we have received since 1962. We also informed yesterday that private property of two Embassy military officers which seized when house they rented from William Palmer taken over early this year will be returned to us, ending nine months of bickering. This morning USIS books which held in storage since March were turned over to Ministry of Higher Education for use by Indo universities.

3. Indo political change not yet complete, however, and old government structure still stands in way of positive actions in some fields. Major problem for army is fact it still saddled with Sukarno. Army obviously not happy with what he says and does but still reluctant to take any direct action to remove him. It thus possible he will remain head of state although we do not believe he will regain dominant political role. In any event, we as well as army may as well face fact we may have to live with him for a while.

4. Even if Sukarno remains, we believe odds are that Subandrio will go and that locus of power will center more and more on army and civilians cooperating with it. While such government will have number of shortcomings (particularly in skilled personnel), and while it will face problems of staggering proportions, at least it likely to be government with which we can deal realistically on matters of common concern. Whether such government will be able in long run to maintain its authority and prevent fragmentation of control over these scattered islands will depend in large measure on whether army able to maintain momentum which is sweeping it to power and show concrete results in handling enormous economic and administrative problems. Continuing elimination of Communists in most areas and attacks on Chinese in some have definitely weakened public order and this is another of many problems which army will have to tackle. For time being, however, attacks on tattered remnants of PKI are being allowed to continue, although purely racial excesses against Chinese are being held in partial check.

5. As we approach 1966, we are primarily still remaining as far in the background the Indonesian scene as possible, but on near horizon is necessity to be prepared to work with a new order which will still contain many problems for us but will be infinitely more healthy and more promising than what we had before Oct 1.

Green

 

187. Memorandum From the Joint Chiefs of Staff to Secretary of Defense McNamara/1/

JCSM-909-65

Washington, December 30, 1965.

/1/Source: Washington National Records Center, RG 330, OASD/ISA Files: FRC 70 A 3717, Indonesia 320.2-400.3295 (381 Indonesia). Secret.

SUBJECT
Aid to Indonesia (U)

1. (S) A recent message from the US Embassy, Djakarta, contains information indicating that President Sukarno might be re- moved from power after 1 January 1966 and Indonesia may request US aid./2/

/2/Telegram 1797 from Djakarta, December 15. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON) In telegram 1924 from Djakarta, December 30, the Embassy suggested that although dissatisfaction with Sukarno had increased, opinions differed on whether he would be ousted in the near future. The Embassy stated that "on balance we believe Army would prefer not to oust Sukarno at this time unless their hand is forced, most likely by Sukarno himself." (Ibid.)

2. (S) Should this occur followed by an Army takeover, requests for overt economic assistance--especially for foodstuffs--may be substantial. Requests for the overt provision of military materiel probably would not be large. Items which might be requested include ammunition, man-portable radios, light automatic weapons, vehicles, and perhaps C-130 and C-47 aircraft spares. Some training assistance might also be sought.

3. (S) The displacement of President Sukarno by the Indonesian Army could benefit US security interests in the area. While political philosophies within the Army cover the full spectrum of those existing in Indonesia, the Army as a whole appears to be searching for a nonaligned policy which runs counter to President Sukarno's previous alignment as a junior partner of the ChiComs. The Army appears to be the strongest single anticommunist force in the country but will eventually call for civilian leadership which, in turn, probably will represent a nationalist-religious-communist coalition. The US interests would be best served if the government which follows President Sukarno's removal were to be pro-Western. It is more likely that it would be neutralist. In any case, opportunities to influence the course of events will be presented to the United States and it is appropriate to investigate at this time ways in which they can be exploited to US advantage.

4. (S) There are several factors, however, which impinge upon the advisability of immediate overt provision of military aid to the Indonesian Army by the United States:

a. The position of the Indonesian Army is precarious and any overt provision of US military aid at this time could tend to reinforce charges by Sukarno, Subandrio, Peiping, and Moscow that the Army is a "tool of (US) imperialism."

b. Without a demonstrated willingness on the part of Indonesia to discontinue the "crush Malaysia" policy, the United States could be in a position of subsidizing Indonesian aggression and opposing US/UK interests in the area. On the other hand, relaxation and eventual elimination of the confrontation with Malaysia would reduce the cost to the United Kingdom of maintaining military commitments in Malaysia and Singapore and could lead to advantageous economic relations among Indonesia, Malaysia, and Singapore.

c. Problems concerning expropriation of US economic assets, subversive intent toward the Philippines, and recognition of international law in the matter of free passage of the sea straits between Indonesian islands all require resolution.

d. Considering present US commitments in Southeast Asia, the logistics implications of aid to Indonesia must be evaluated.

e. In view of Indonesia's past tendency to export aggression, the impact on neighboring countries of aid to Indonesia should be considered.

5. (S) The Joint Chiefs of Staff recommend that:

a. The United States, if requested, be prepared to provide Indonesia a limited quantity of emergency foodstuffs/medicines in the interest of showing support for the new government.

b. Since the campaign of the Indonesian military leaders against the Indonesian Communist Party (PKI) appears to be progressing according to plan and no US military assistance appears required for internal security, the United States should not overtly provide military aid to Indonesia at this time.

c. Prior to giving favorable consideration to additional requests for overt aid, the problem areas outlined in paragraph 4, above, must be substantially resolved.

d. The Department of State and the Department of Defense jointly establish criteria for the resumption of overt military and economic assistance.

e. A memorandum substantially as contained in the Appendix hereto be forwarded to the Secretary of State./3/

/3/Attached but not printed.

For the Joint Chiefs of Staff:

David L. McDonald/4/
Acting Chairman
Joint Chiefs of Staff

/4/Printed from a copy that indicates McDonald signed the original.

 

188. Memorandum From the Deputy Special Assistant for National Security Affairs (Komer) to Chester L. Cooper and James C. Thomson, Jr., of the National Security Council Staff/1/

Washington, January 19, 1966.

/1/Source: Johnson Library, National Security File, Files of Robert W. Komer, Indonesia, Nov. 63-Mar 66, [1 of 3]. Secret. A copy was sent to McGeorge Bundy.

Since you guys are less suspicious than Bundy that I am horning in on Indonesia, note Djakarta's 2092./2/ Here's the first time I've seen Marshall Green himself shifting ground and recommending that he be allowed to tell the Army we would join in providing emergency aid if really needed.

/2/In telegram 2092 from Djakarta, January 19, Green reported that Helmi of the Indonesia Foreign Office reiterated his plea for emergency assistance for the Army from western countries. Helmi suggested that 300,000 to 350,000 tons of rice, 50 million yards of cotton cloth, and medical supplies were needed to prevent friction within the Army ranks and disillusion among the general public. Helmi estimated the cost at $50 million and suggested that western donors share the burden. Green recommended telling Helmi that he (Green) would meet with Suharto and Nasution to explore the question of aid and at least give them assurances that emergency aid would be forthcoming when the time was right. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON)

Marshall is a quick study; he's also the man on the spot. So perhaps we should use his views as a lever to move our reluctant FE friends.

It's also worrisome to me when we do nothing but discourage the Japs, Germans, and others who come in to ask whether they should now contemplate aid. It's one thing to say that we think it too soon to talk of aid, but quite another to avoid even indicating that if things continue to go well we would probably change our tune.

With things still breaking our way in Indonesia,/3/ I cannot understand the reluctance of State even to get ready to exploit it. If they think the President would be reluctant, I'll bet they're wrong. He was very forthcoming on Ceylon, and even bought aid to the UAR when we convinced him.

/3/In OCI No. 0481/66, January 3, "The Changed Political Scene in Indonesia," the Office of Current Intelligence of CIA stated that Indonesia was at "a major turning point in its history. The era of Sukarno's dominance has ended." (Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65-5/66) In a January 7 memorandum to William Bundy, Cuthell suggested that "in the months and years ahead it is clear that the Indonesian military, and more particularly the Army, will dominate as it has never before the Indonesian political scene." (National Archives and Records Administration, RG 59, EA/Indonesia Files: Lot 70 D 3, Pol 2 Gen)

RWK/4/

/4/Printed from a copy that bears these typed initials.

 

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

Washington, January 20, 1966, 1:48 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) INDON. Secret; Priority; Limdis. Drafted by Underhill, cleared by Cuthell and Barnett, and approved by Berger. Repeated to CINCPAC for POLAD.

969. Ref Embtel 2092./2/

/2/See footnote 2, Document 188.

1. Suggest DCM reply to Helmi along following lines: We wish to convey to Helmi and through him to Generals Nasution and Suharto two basic interrelated and inseparable thoughts:

a. The US continues to be interested in the welfare, progress and independence of the Indonesian people and is prepared assist GOI in its efforts achieve these objectives, and

b. Only the Government of Indonesia can create the conditions in which it is possible for USG to play this role.

2. The lack of favorable response to Helmi's previous overtures is not due to any negative attitude or lack of friendship or sympathy, but rather to fact that Indonesia has not yet created situation in which the US can be of assistance to Indonesia.

3. Following are major elements still missing:

a. In regard both emergency and development aid, we must be sure we are dealing with cohesive and effective GOI which can and will use it effectively.

b. We can only deal openly and publicly with Indonesian Government on matter of aid. It is impossible for a democratic country such as the US, responsible to Congress and to its people, to give substantial assistance covertly.

c. Cooperation with Indonesia has never been conditioned on US-GOI agreement on all issues, but US people could not give, nor Indonesian people accept, assistance when the US is being publicly identified by highest GOI officials as arch enemy of Indonesian people.

4. Under these circumstances US can do nothing but wait. Initiative is in Indonesian hands not in our own.

5. FYI. We do not wish Helmi, nor through him Suharto-Nasution, to get idea US assistance merely awaits green light from Army leadership. Process of basic political and economic change begun in weeks following October 1 with elimination PKI has slowed down. (It is significant Helmi-Suharto now see substantial aid from West given to a GOI still headed by Sukarno with Sukarno hopefully prepared accept aid as act of grace.) There is presently no evidence that assurance of US and other foreign assistance would accelerate and not retard changes which Indonesia in its own interest must make. Army discouragement on aid prospects under present circumstances may in fact by necessary additional spur to move it into further action.

6. Believe DCM should not suggest direct contact between you and either Suharto or Nasution on subject US assistance at this time. Fact of meeting at our initiative will be interpreted as conclusive evidence US in fact eager provide assistance in present circumstances if way can be found. Also, in context current Sukarno-Subandrio campaign against you and Embassy, meeting with either of top generals would seem inconsistent with both Nasution's and Malik's advice./3/ End FYI.

Rusk

/3/In telegram 2138, January 22, the Embassy reported that DCM Galbraith made the points enumerated in this telegram to Helmi who accepted with "relatively good grace although he was obviously disappointed." Helmi clearly believed that the United States was being too negative in the face of the Army's real needs and achievements of the past four months, but he would pass the U.S. position to the Army. (National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) INDON)

 

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

Djakarta, February 2, 1966, 1210Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON. Secret; Priority. Repeated to Canberra, CINCPAC for POLAD, Bonn, London, Medan, Paris for NATUS, Tokyo, and Surabaya.

2204. 1. Following message summarizes some personal opinions as to course of events in Indonesia and implications for US policy.

2. During first three weeks of December army scored considerable gains in its power struggle with the palace. During this period a prestigious triumvirate was named to direct KOTI (top policy and coordination body) with expanded powers, Subandrio was under heavy challenge, his intelligence branch (BPI) was reported to have been transferred to control of KOTI, KOTOE was abolished, Gestapu trials were announced, and left-wing political groups were being driven more and more to cover. A number of specific though small irritants in US-Indo relations were removed. By the end of the month there were rumors, some emanating from well informed sources, to effect that major shifts expected in January which would also see departure of Sukarno for extended trip abroad.

3. January, however, was marked by a number of set-backs for the army's position and by a recrudescence and regrouping of palace forces. In retrospect it appears that important showdown occurred at conclusion of three-day KOTI session on December 18 when President apparently refused to ban PKI and reasserted all his old positions. Up to that point army leadership had been operating on wishful theory that President could be brought into line on such key issues as banning the PKI and reorganizing government structure to give due attention to mounting economic crisis. However, his views were set forth in such uncompromising terms during crucial KOTI session December 16-18 that all present realized he was not going to concede one inch. Question arose: What should the army and moderates now do? There followed a short period of indecision with majority of army group, led by Nasution, favoring no action to confront President Sukarno directly and decisively. Their unwillingness to tackle Sukarno may have reflected concern as to loyalty of rank and file in the military were army to find itself in open opposition to Sukarno. Army may also have rationalized that since Sukarno and his clique refused to cooperate willingly it might be better tactic to leave them in power and let them bear full responsibility for economic deterioration.

4. When it became revealed to President in late December that army was unwilling to take any concerted action against him, he saw wider scope for his operations.

5. Public reaction during first two weeks of [garble--January?] to high prices on rice, kerosene, transportation, etc. permitted the army to move behind public opinion and encourage students to take to streets denouncing PKI, Subandrio, Sukarno's monuments and other things offensive to army and moderates. This agitation culminated on January 15 when thousands of students tried to storm gates of Bogor Palace, requiring Suharto's personal appearance before them to urge restraint. President was obliged to promise that his economic ministers would review the situation to see whether prices could be lowered.

6. Bogor Palace episode seems to have shocked the army, as much as Sukarno, re serious consequences which army would face were these disorders to get out of hand as they almost did. Thereafter army and President were genuinely united in a resolve to prevent further disorders and to crack down on students, Moslems, and others who might go to extremes. Army made its position clear to these various groups.

7. Net effect of recent events has been to discourage some of army's civilian allies and give Sukarno additional leeway to maneuver. Moderate political leaders tend increasingly to regard army as untrustworthy ally that is willing to push civilian groups to fore but deserts them when Sukarno attacks. This attitude will reduce army's ability to use such groups later.

8. Sukarno has been operating on the theory, I believe, that the longer he can delay his political solution the better chance he has of being able to accelerate realization of his cherished goals of NASAKOM and CONEFO. Possibly he feels that to announce such a solution today would invite more serious risks of counter action than to make such an announcement, say, two months from now when further divisions amongst the army, parties, religious and youth groups would have weakened his opposition. Moreover, uncertainty over political solution may feed policy differences within army itself. As long as Sukarno can sustain idea that he may ban PKI or otherwise make decision for which army leaders hope, it seems likely that a number of army voices would favor policy of "not rocking boat."

9. On the other hand, Sukarno is obviously under a great deal of pressure from many quarters to announce his decision. There is also the compelling factor that foreign governments from which Sukarno hopes to get additional assistance and relief on debt payments will be leery about actions to help Indonesia pending clarification of political situation and more importantly evidence that Indonesia has at long last come up with sound organization and plans.

10. Although we have reports from at least two reliable sources that Sukarno may very shortly announce his political decision involving promotion of NASAKOM, there would seem to be a somewhat better chance that Sukarno will go no further at this time than announcing some limited reorganization of his cabinet that would give the appearance of providing Indonesia's economy with better direction and organization. Such an announcement might, in Sukarno's opinion, set the stage for sending out missions to foreign capitals looking for debt relief and credits. He might feel that this was all that was required, particularly if men selected for top economic roles both in Djakarta and on these missions enjoyed good reputations with the countries concerned.

11. Army leaders might find such a quasi-solution acceptable on several grounds. A full-scale political decision would probably involve a Sukarno announcement they would not favor, and could also touch off sharp reactions and even disorders of a nature which army obviously wishes to avoid. Moreover army would rationalize that, if economic situation continues to worsen and if missions Sukarno sends to other countries come back empty-handed, President may be forced by events to accept the kind of reorganization of cabinet and attention to economic problems which the army and other moderate elements seek. Hopefully Sukarno could thus be brought to heel.

12. At present and for at least the near future, Nasution seems to regard the army's role in the power struggle as directed toward maintaining law and order and preventing any kind of excesses either from the students or Moslems, or even the Presidium. The kind of Presidium excesses which army would probably not countenance would include outright legalizing of PKI, close Djakarta relations with Peking, and actions that might isolate Indonesia even further from friends on whom army and moderates might later on have to count in accepting greater responsibility for government. I believe army would regard breaking of diplomatic relations with US to fall in this category of impermissible actions. Whether it would include unfriendly acts toward the US such as the eviction of some of its diplomats here is less certain.

13. I continue to feel that, as long as Sukarno has as much power as he has today, current political and economic chaos will continue and probably deepen, and that he will be working relentlessly to drive the revolution leftward in direction of his goals of NASAKOM and CONEFO.

Current army strategy of trying to chip away at powers of President may succeed, but there is in my opinion an almost equal chance that President can successfully divide and conquer his opposition./2/

/2/The Office of Current Intelligence at CIA, produced an Intelligence Memorandum, OCI No. 0494/99, February 4, entitled "Paralysis in Indonesia." It concluded that neither Sukarno nor the Army were able to impose their will on the other, but Sukarno believed that time was on his side in achieving his goal of reestablishing himself at the center of Indonesia political life and reviving the left in Indonesia. (Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65-5/66) In telegram 2260, February 9, Green reported a conversation with Malik in which Malik's "interpretation of events and trends almost entirely accord with view I expressed in Embtel 2204." Green reported that Malik added additional information on the disintegration of Indonesia's economy and the political consequences. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON)

14. US capabilities to shape events are very slight, but we do have some common interests with countries like Japan which have aid programs and considerable influence in Indonesia. If these countries require a realistic attack by GOI on its basic economic problems before they are willing to grant Indonesia relief on debts and to extend further credits, this might in itself have a salutary impact and could strengthen the hands of those in Indonesia who seek such changes.

15. It might be useful to draw upon this theme in our discussions with the countries concerned taking extreme care, of course, not to expose ourselves to any appearances that we trying to get friendly countries to gang up against Indonesia. As Embtel 2195 points out,/3/ donor countries have reasons enough to require reasonable assurance re Indonesia's economic and other policies before extending additional assistance.

/3/Dated January 31. (Ibid., POL 2-3 INDON)

Green

 

191. Memorandum of Conversation/1/

Washington, February 14, 1966.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 2 INDON. Secret. Drafted by Goodspeed on February 16. The meeting took place in Rusk's Office and began at 4:47 p.m. Rusk's next appointment was at 5:10 p.m. (Johnson Library, Rusk Appointment Book) Berger sent Rusk a short briefing memorandum for this meeting. (National Archives and Records Administration, RG 59, EA/Indonesia Files: Lot 70 D 3, PER 9-3 Consultation)

SUBJECT
Indonesia--Consultation

PARTICIPANTS
The Secretary
Marshall Green--U.S. Ambassador to Indonesia
H. Kent Goodspeed--Officer-in-Charge, Indonesian Affairs

1. Ambassador Green reviewed the present situation in Indonesia, four and one-half months after the abortive Communist-backed coup of October 1. He noted that there have been several favorable achievements, albeit mostly of a negative nature: the PKI has been destroyed as an effective political force for some time to come; the axis with Communist China is in disarray; the Afro-Asian solidarity movement has suffered; and Sukarno's personal image has been tarnished. On the other side of the ledger, Sukarno's ideology still pervades Indonesian society, Subandrio and other leftist ministers have managed to retain a large degree of their power, and the momentum evident in November and December to reorganize and drastically reform the governmental structure has been lost, largely because of the Army's fear of widespread civil disorder and chaos. The Army has, in a sense, bought unity at the expense of further action. The Army, as well as Moslem political groups who have a vested interest in preventing the resurgence of the Communists that have been decimated by wholesale massacre, will prevent a renaissance of the PKI. The Army will also oppose attempts to revive close relations with Communist China. Beyond that, the Army is unlikely to openly confront Sukarno, who retains his charisma with the Indonesian people and his domination of the older generation of political and military leaders.

2. The impetus for change at present comes mainly from the younger generation, particularly from student groups, and is sparked by dissatisfaction with the incredibly bad management of government coupled with increasingly chaotic economic conditions. Inflation and the increase in money supply are rampant, and there are some areas suffering from food shortages. In addition, years of living on a structure of pyramiding credits have brought on a severe foreign exchange crisis that is likely to be the spark igniting further political change. Indonesia has a total foreign debt of approximately $2.5 billion on which payments due in 1966 are $470 million. Since foreign exchange earnings are expected to amount in the neighborhood of only $450 million, service on the debt will obviously have to be rescheduled. However, to date Indonesia has offered no signs of being willing to talk with creditors as a group or to demonstrate it is prepared to tackle its problems in a rational manner to induce capital exporting countries to be able or willing to be of any assistance. The Army is following a policy of remaining aloof from assuming the responsibility for economic problems; and although the Army leadership has put out some feelers, it has made it known privately that it does not want outside assistance at this time.

3. Reviewing the present state of relations of various countries with Indonesia, Ambassador Green noted that the U.S. position was at least much better than in the pre-October 1 period, ChiCom-Indonesian relations are becoming increasingly strained, and the Soviet position is at best unenviable. The Russians are in the embarrassing situation where an Army in which they have a large investment is actively suppressing a Communist Party, but at the same time they are not displeased with the destruction of the power of a thoroughly ChiCom oriented Communist Party. The Soviets probably would not object to a situation developing in Indonesia somewhat analogous to India, with both the U.S. and the USSR providing aid and with Communist China out of the picture.

4. The Secretary noted that if the U.S. were ever able to play a role in Indonesia again, particularly in regard to providing economic assistance, there were two important prerequisites: some satisfactory resolution of the Malaysian confrontation irritant, and some rational policy toward U.S. oil companies that would not terminate in precipitous action that would bring the Hickenlooper Amendment into effect./2/ Ambassador Green said that the military viewed confrontation as an unproductive drain on Indonesian resources that only served to divert military power from more pressing internal security functions, but that a termination of confrontation would more likely take the form of a gradual withering away rather than be the result of a negotiated settlement. The American oil companies are faced with difficult problems, but Ambassador Green expressed the hope that through a moderate and far-sighted approach to negotiations they would find a formula to remain in Indonesia; or that if impelled to pull out, they would do so without retaliatory measures that would set off severe anti-American reactions.

/2/The Hickenlooper amendment was to the Foreign Assistance Act of 1961 and was revised in 1963. It forbade U.S. assistance to nations which expropriated U.S. foreign property and assets without compensation. (77 Stat. 386)

 

192. Memorandum From the President's Deputy Special Assistant for National Security Affairs (Komer) to President Johnson/1/

Washington, February 15, 1966.

/1/Source: Johnson Library, National Security File, Files of Robert W. Komer, Indonesia, Nov. 63 to Mar. 66, [1 of 3]. Secret.

Marshall Green Appointment. This is a good time for you to talk with our man from Indonesia, because of simmering policy differences within the USG. We all agree that the Army/Sukarno split is a good thing, and want to encourage the military--no matter how neutralist they are, they're much better than Sukarno. But he's been regaining ground against them recently.

The issue is whether to give a bit more quiet support to the Army. As Indonesia's economy slides downhill, we've had numerous approaches asking that we at least underwrite emergency rice purchases by the Army. The latest is at Tab A./2/ State turned it down (Tab B)/3/ on grounds of conflicting advice from the Army not to help them yet.

/2/Tab A, telegram 1663 from Bangkok, February 14, in which Chester Cooper, who was traveling with Vice President Humphrey, reported a conversation of February 12 among himself, Humphrey, and Thai Air Chief Marshal Dawee. During this conversation and in a meeting with Cooper the next day, Dawee encouraged the United States to grant emergency assistance to the Indonesian Army, specifically a request from General Achmed Tirtasoedior for a letter of credit to allow him to purchase 200,000 tons of rice in Thailand. (National Archives and Records Administration, RG 59, Central Files 1964-66, INCO RICE 17 INDON-THAI)

/3/Tab B, telegram 1439 to Bangkok, February 14, in which reasons were cited for the denial including the inability to keep covert such a letter of credit, and the Army's apparent access to Indonesian foreign exchange earnings as evidence by advance payments of $18 million for two DC-8 aircraft and $11 million for another project. (Ibid.)

/4/Tab C, telegram 1608 from Karachi, February 15, from Humphrey to President Johnson and Rusk. (Ibid.)

Now the VP is in, saying the Thais see this as our great opportunity and urging we not miss the boat (Tab C)./4/ I've talked with Green, who would like authority to move when he sees the right opening, but is dubious that this latest play is it. He's probably right. But if you give him (and Bill Bundy who'll be along) a sense of your own desire not to miss the boat in Indonesia, it will encourage State not to be too unimaginative when we may at last have Sukarno on the run.

R. W. Komer/5/

/5/Printed from a copy that bears this typed signature.

 

193. Briefing Notes for President Johnson/1/

Washington, February 15, 1966.

/1/Source: Johnson Library, National Security File, Files of Robert W. Komer, Indonesia, Nov. 63 to Mar. 66, [1 to 3]. Secret. These notes were originally prepared as a draft memorandum for the President, but Komer changed them to Briefing Notes for the President's meeting with Marshall Green on February 15; see Document 194. Attached but not printed is a brief biographical sketch of Green. The Department of State also prepared a February 12 briefing paper for the President. (National Archives and Records Administration, RG 59, EA/Indonesia Files: Lot 70 D 3, PER 9-3 Consultation)

SUBJECT
Meeting with Ambassador Marshall Green Tuesday, February 15

Marshall Green has returned for consultations at a moment when Sukarno's political adroitness is recouping for him much of the power assumed by the military following the PKI's abortive coup last fall.

After employing brilliant "salami" tactics in eliminating the PKI as an effective political force, Generals Nasution and Suharto are now temporizing in using the political leverage they have gained against Sukarno. The military fear their unity will not hold up under a direct challenge to Sukarno and are once again reverting to a policy of pursuing limited political objectives. Sukarno is exploiting the military's hesitation to reassert his full powers and continue in force his radical left domestic and foreign policies.

In effect, "two governments" are now competing for power and attempting to administer the country. The struggle is likely to continue for some months without clear resolution, but Sukarno has maneuvered into a somewhat better position to come out ahead.

Without effective government, severe inflation is rampant and the economy continues its dangerous slide into chaos. The military are attempting to saddle Sukarno with responsibility for national mismanagement while seeking their own essential rice supplies through private channels abroad.

Our policy during this period has been to maintain correct relations with the government without attempting to initiate new aid or other programs of support. We are reluctant to bolster Sukarno through new monetary stabilization and other aid, are still awaiting clarification in the current political confusion, and are coupling aid with the necessity for improved diplomatic relations and changes in Indonesian policies. The military have been opposed to new, overt foreign economic assistance until they have achieved certain (undefined) political changes.

Our ability to respond to Indonesian requests for aid when they are made may be hampered by the simmering crisis between the Indonesian Government and U.S. oil companies. The momentum of Indonesian harassment has continued since the abortive coup last fall.

Green considers the next six months critical. You may wish to raise with him:

1. Whether our present posture remains viable in the face of Sukarno's reassertion of his authority.

2. A specific question might be whether expanded quiet U.S. assistance to the military might place them in a better position to blunt Sukarno's impetus toward restoring his radical left policies./2/

/2/Komer sent a February 10 memorandum to the President to obtain approval of the meeting with Green. In that memorandum he noted that "The power struggle between Sukarno and the Army is the second biggest story in Southeast Asia" and the outcome was still uncertain. Komer suggested giving "a little more discreet help to the Army; or at least to tell them we'd do so if and when they made the right noises. A word from you to Green would stimulate contingency planning." (Johnson Library, National Security File, Memos to the President, McGeorge Bundy, Vol. 20, Feb. 5-28, 1966)

We have serviceable channels to the military if more extensive quiet support is desired. We have so far limited this to the provision of medical supplies and communications equipment.

R. W. Komer/3/

/3/Printed from a copy that bears this typed signature.

 

194. Memorandum of Conversation/1/

Washington, February 15, 1966, 11:55 a.m.-12:20 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL INDON-US. Secret. Drafted by Green and approved in the White House on February 23. The meeting was off the record. The time of the meeting was taken from the President's Daily Diary. (Johnson Library)

SUBJECT
Indonesia

PARTICIPANTS
The President
Assistant Secretary William P. Bundy
Ambassador Marshall Green
Mr. Robert Komer

At the President's request, Ambassador Green discussed current and prospective trends in Indonesia, concluding with some general recommendations as to United States policy in dealing with Indonesia. The Ambassador pointed out that, even though relations between Indonesia and the United States continue to be far from satisfactory, the abortive coup last October 1 had resulted in a crushing of the Communist Party; a great loss of international prestige for Peking, whose hand was suspected as involved; a continuing worsening of relations between Indonesia and Communist China; a blow to Sukarno's pretensions as leader of the "new emerging forces" against the Western world; and a certain loss of prestige and standing for Sukarno among his own people. However, Sukarno remains on as President and leader of the revolution. He is succeeding to some extent in playing upon the divisions and fears of his opponents in regaining power. He seems bent upon getting the revolution back on leftward course. He is clever and persuasive and still seems to have extraordinary physical reserves.

According to Ambassador Green, the Army-led opposition to Sukarno, though unwilling to oppose Sukarno directly or frontally, is deeply opposed to any revival of the Communist Party and to close relations with China. The opposition would also like to see better organization and more pragmatism in government. However, fearful of civil disorders, concerned over the loyalty of their own rank and file and infected with a good deal of Sukarnoism, the Army is reluctant to oppose Sukarno directly. The military may also be reluctant to assume too much responsibility for events as long as Indonesia continues its downward course, economically and politically.

Ambassador Green felt that the deepening economics chaos, especially the crisis over foreign exchange and the tendency of various ministries to bypass the central bank, may force things to a head within the next six months or so. The situation in Indonesia is going to be extremely messy for some time to come, he added, and it is impossible to predict with any degree of accuracy the relative likelihood of a whole series of possible eventualities. What does seem to be relatively clear is that we are now in an extended transition phase between Sukarno and an unknown successor.

In this situation, the Ambassador felt that the United States should continue to maintain a low profile and preserve its options. The Ambassador said he greatly appreciated the way American officials from the President on down had avoided public statements about Indonesia. Maintaining this kind of low posture continues to be essential, since anything the United States says or does about Indonesia is subject to distortion and misinterpretation. We continue to be deeply suspect of trying to interfere in their affairs, which we of course are not doing and must not do.

The President asked whether all United States assistance to Indonesia, including assistance to the military, had been terminated. The Ambassador said it had, and he recommended that the United States not extend further assistance to Indonesia until it really begins to set its house in order. He pointed out that Sukarno is outspokenly opposed to any United States assistance to Indonesia whereas the top Indonesian military leaders have themselves secretly conveyed to us and to the Japanese that they are opposed to any assistance at this time since it would benefit Sukarno and Subandrio.

The Ambassador nevertheless felt that we should keep an open mind with regard to aid. A situation might suddenly arise where supplying Indonesia with limited quantities of grain might be desirable on humanitarian grounds as well as to help prevent outbreaks of food riots and disorders that could endanger foreigners in Indonesia.

If the Indonesians do begin to undertake significant measures for improving their organization and direction, then, in the Ambassador's opinion, we should be prepared to lend a helping hand, preferably through a consortium arrangement or through international bodies like the ADB.

Summary of Action

The President said he appreciated having these observations and that he would leave it to the Ambassador to make specific recommendations as to the timing and conditions under which the United States might extend assistance to Indonesia.

 

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

Washington, February 15, 1966, 7:13 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, INCO-RICE 17 INDON-THAI. Secret; Immediate; Exdis. Drafted by William Bundy, cleared in substance with Komer, cleared by Green, Berger, and Underhill; and approved by William Bundy. Repeated to Djakarta and New Delhi.

1451. Embtel 1663./2/

/2/See footnote 2, Document 192.

1. We have again reviewed reftel matter, including general consideration at all levels, and believe we must adhere to basic position stated Deptel 1439 to Bangkok,/3/ on which we gather you have not yet acted. In reaching this decision, we have taken full account of additional conversation with Thanom and Thanat reported in Karachi 1608/4/ (being repeated addressees).

/3/See footnote 3, Document 192.

/4/See footnote 4, Document 192.

2. In view of strong affirmative urgings of Thanom and Thanat, we now believe best tactical method might be to discuss matter frankly, probably with Thanat, before we make any response to Achmad./5/ Accordingly, you should see them and make following points fully and frankly:

/5/In telegram 1694 from Bangkok, February 17, Martin suggested that Dawee was the principal Thai official supporting Achmad's efforts and Thanat had suggested U.S. support only if the transaction could be a "completely 'clean' deal." Since Thanat and Thanom were leaving for Australia, Martin had his frank discussion with Dawee who said he understood the U.S. decision, but regretted it. (National Archives and Records Administration, RG 59, Central Files 1964-66, INCO-RICE 17 INDON-THAI) In telegram 1701 from Bangkok, February 18, the Embassy reported that Achmad had been informed of the U.S. decision and at the same time assured of U.S. sympathy for Nasution and Suharto. Achmad regretted the decision, but stated he understood the U.S. position. (Ibid.)

a. We accept Achmad's authorization to try to buy rice from Thailand, and even to seek US credit backing for so doing. However, our own contact with Indo military in Djakarta has left us with clear understanding that Nasution and Suharto do not wish anything at present time that could be identified as US aid. Accordingly, we are at present skeptical of validity Achmad's statement that he is not worried by possibility that Sukarno would discover US involvement. Our own contacts leave us with directly contrary understanding, so that our present impression is strongly that any US role would have to be totally covert.

b. Any transaction on the scale of 50,000 tons, involving roughly $7 million, simply cannot be handled by USG on covert basis. We have examined this question exhaustively and believe reports to the Congress of action taken, if not an outright Presidential Determination, would be required, which in the existing state of Congressional opinion, with at least a few vocal questioners of such action, would mean that our action would almost inevitably become public at US end.

c. Moreover, Indonesian lack of credit is well known in rice market and any credit transaction would lead to immediate questions whether Thailand could conceivably be carrying on such operation from its own resources and to surmise in wide circles that USG was actually backing transaction. This factor alone would appear to us to remove any possibility that sizable transaction could be kept covert.

d. Assuming that US role would thus come to light, there is our strong judgment that exposure would be used by Sukarno and Subandrio against Army leadership as evidence US efforts interfere Indo domestic affairs. This could have serious and indeed potentially disastrous effect on Army's current efforts to get clear upper hand in face Sukarno's increasingly resourceful political tactics.

e. In addition, from policy standpoint, USG would have some doubt whether direct assistance to Army at this time might lead to weakening Army resolve to work for basic economic reforms necessary to create foundation on which outside assistance would have regenerative effect.

f. As to Thai argument that Chicoms likely to give rice to Sukarno, our own judgment is that Peiping/Djakarta relations are now at a new low and that Chicoms must be well aware that Army in fact would control disposition any rice arriving in Indonesia and would see to it that military needs met first.

g. Net of above is that we simply cannot see our way clear at this time to take risks, amounting we believe to certainty, of disclosure USG role, in return for doubtful benefits.

3. You should then discuss frankly with Thanat whether they or we should convey any message to Achmad for time being. FYI: Although they have clearly thought any transaction depended on us, our response may cause them to reflect on handling at least modest trial deal on their own. If so, we might wish to concert our response to Achmad with what Thai say. End FYI. In any case, we would not wish Thai to speak for us to Achmad other than along lines Deptel 1439, and if Thai have no other ideas we should probably get this message to Achmad ourselves after quick turnaround here.

4. In conveying all of above, you should of course make clear that our reluctance proceed with this proposal indicates no lack of sympathy in Indonesian problem nor unwillingness to help when we feel time is ripe and preferably when assistance would be of maximum benefit to Army. If for humanitarian as well as political reasons some injection rice and other essential consumer commodities became necessary we would be prepared consider rapid action. However, we do not believe situation has reached this critical a point as yet. In any event, we wish continue close consultation with Thai on Indonesian developments.

Rusk

 

196. Telegram From the Department of State to the Embassy in New Zealand/1/

Washington, February 18, 1966, 6:12 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, INCO-RICE 17 INDON-THAI. Secret; Immediate; Exdis. Drafted by Underhill, cleared by Berger and in draft with Green, and approved by William Bundy. Repeated to Djakarta and Bangkok.

620. Wellington for Vice President and Harriman. Ref Canberra's 604./2/

/2/In telegram 604 from Canberra, February 18, Humphrey and Harriman stated that despite the "elaboration of familiar doubts and risks," they still favored giving Achmad's approach serious consideration. The risks cited were less potentially damaging than "missing a key opportunity to affect outcome Indo power struggle at critical pre-harvest juncture." (Ibid.)

1. We are repeating to you Bangkok telegrams 1694 and 1701/3/ and Djakarta's 2313,/4/ which provide further information on Achmad rice purchase project.

/3/See footnote 5, Document 195.

/4/In telegram 2313 from Djakarta, February 16, the Embassy fully agreed with the Department position. (National Archives and Records Administration, RG 59, Central Files 1964-66, INCO-RICE 17 INDON-THAI)

2. Ambassador Green returning Djakarta this week-end and prior his departure for Baguio meeting he will explore food situation and Army interest in rice purchase.

3. Achmad approach is one of a number of semi-official Indonesian efforts probe availability of rice under favorable terms from range of possible suppliers. Japanese have in past indicated readiness to supply if they are convinced of real need and favorable political impact. There are, in short, alternative sources of supply less dangerous to Army and donor country.

4. We now have in final stages of approval project to increase PL-480 Title IV shipments of foodstuffs from current 10,000 tons annual level to 50,000 ton level under Catholic Relief for distribution in areas where Army considers greatest need exists. Details worked out directly between CRS and Indo authorities with a view to minimizing political risks while giving Army tangible evidence of our desire to help.

Rusk

 

197. Memorandum From the President's Special Assistant for National Security Affairs (Bundy) and Chester L. Cooper of the National Security Council Staff to President Johnson/1/

Washington, February 21, 1966, 7:30 p.m.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65-5/66. Secret. There is an indication on the memorandum that the President saw it.

SUBJECT
Indonesian Developments

Sukarno has ousted General Nasution as Indonesian Defense Minister, removed several other moderates from the cabinet, and added seven leftist ministers./2/ Unless the Indonesian military challenge these decisions, this development will restore Sukarno to full political control and will negate Indonesia's anti-Communist tendencies that have been at work since October. If the military decide to reverse Sukarno's decisions, and it is not at all clear that they will, the situation could degenerate into civil war.

/2/In telegram 2341 from Djakarta, February 20, the Embassy reported a "real crisis shaping up between Sukarno and Army." Telegram 2360 from Djakarta, February 22, contains a complete list of the "reshuffled Dwikora Cabinet" announced by Sukarno on February 21; telegram 2364 from Djakarta, February 22, contains biographic data on new members of the cabinet; telegram 2365 from Djakarta, February 22, contains the Embassy's comments on the new cabinet organized by major functions. (All National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15-1 INDON)

Reports from our Embassy tend to conclude that the military, and particularly Army Commander General Suharto, may not contest Sukarno's move at this time./3/ This would be consistent with the military's past record of avoiding direct political confrontation with Sukarno and of playing out a game of maneuver.

/3/As reported in telegrams 2353 and 2363 from Djakarta, February 22. (Ibid., POL 23-9 INDON and POL 15-1 INDON, respectively)

There are factors currently at work, however, which make this situation more fluid than usual. In pressing a nationwide campaign of five months against the Indonesian Communist Party, the military have unleashed religious and political emotions that have even been directed against Sukarno, himself, and that might be difficult to hold in check. This would be particularly true if Moslem and youth elements receive any encouragement from the military. There are some reports that the military plans to foment demonstrations to afford a pretext for their re-imposition of martial law and the reversal of Sukarno's decisions. This would lead to the direct confrontation with Sukarno that the military has always avoided. But some Army elements might be ready to accept the risks of internal military strife rather than lose the opportunity of completing the internal political changes their moves against the Indonesian Communist Party set in motion.

Although the situation is confused and fluid, one thing is clear: few if any U.S. initiatives to influence the course of events are apparent.

CLC
McG. B.

 

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

Djakarta, March 4, 1966, 0830Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON. Secret; Priority. Repeated to Bangkok, CINCPAC for POLAD, Hong Kong for Ambassador Green, Kuala Lumpur, London, Manila, Medan, Singapore, Surabaya, and Tokyo.

2469. 1. Following is Embassy analysis of present political situation and future prospects insofar as these can be determined in highly fluid situation.

2. Tactics of major participants in political struggle have emerged more clearly during past week. According present indications they are as follows:

A. Students. Students appear to realize that they themselves cannot bring down present Indonesian Government and that only army can do so. However, they feel strongly that army has waited too long and that they must goad it into moving despite itself. Student demonstrations and other activities are thus designed to force army to act.

B. Army. According some [less than 1 line of source text not declassified] reports army, for its part, hopes use students and other groups to heat up atmosphere and then move against Subandrio and other leftists in high places using excuse of need to restore security. Sukarno is not direct target of this strategy but some within army reportedly realize he would probably resist any action against Subandrio and that army must therefore be prepared meet him head on if necessary. (Note: Strategies of army and students fit neatly together if army does, in fact, move before student campaign loses steam.)

C. Sukarno. Sukarno apparently believes that strong stand will divide and weaken his opponents. During past week he has returned number of radical leftists to positions of power, banned Student Action Command, prohibited demonstrations and closed university. He is apparently aware that many within army are reluctant to confront him directly and believes that policy of firmness will further intimidate military, as it has in past, and lessen chances that army and civilians can unite against him in effective action.

3. Thus far old Sukarno magic is not working as usual. Student activities have continued unabated despite clear evidence of his displeasure. Yesterday's activities were most open attack to date on Subandrio, and Sukarno himself has come in for some criticism. As campaign progresses students seem to be developing greater self- confidence and sense participation in significant historical turning point. Their determination is increased by numerous indications that majority of people of Djakarta are with them.

4. There is still no firm indications that army will act although some knowledgeable Indonesians during past few days have become more optimistic. General Sukendro, in contrast to his earlier pessimistic moods, told New Zealand Charge March 2 that generals may soon decide to become "patriots instead of soldiers." However, exact nature and timing of any army move against Subandrio or others in top positions remain uncertain and it seems likely that army itself has not firmly decided on these crucial questions.

5. Despite uncertainties in present situation there are number of elements which make present situation more encouraging than it has ever been in past:

A. Students and other civilian activists now seem to realize more than ever before that they must lead army rather than simply wait for it to act.

B. Younger officers within military are also dissatisfied with lack of action by their superiors. This is additional element which could at some point tip balance in favor of military action.

C. Army tactic of soliciting petitions from lower ranks could also increase role of activist elements in determining army policy. Suharto, who has reportedly asked for such petitions to strengthen his hand with Sukarno, could actually get more than he has bargained for.

D. Increased student activity places greater pressures on palace for countermeasures. Escalation in present campaign could be dangerous for palace since it might eventually lead to more open army intervention on side of students.

6. Balanced against these favorable elements is not inconsiderable ability of Sukarno to manipulate forces, as he recently did with Nu and Muhammadiyah. Army's position itself has a number of built-in vulnerabilities. Its tactics are overly complex and lack clear focus, particularly in continued unwillingness to face up to fact that Sukarno himself is the real problem. Army does not really need excuse of deteriorating security situation to act if it really has will to do so. Moreover, by continuing to reign students in from key targets army is actually hindering creation of "unrest" which it hopes to exploit. There is also possibility that Sukarno-Subandrio might be able to unify elements now against them through dramatic move on international level. Possible new summit on Malaysia, stepped up confrontation, troubles with Philippines, contrived crisis in relations with US or other issue might be used for this purpose, particularly if Sukarno and his supporters become desperate as result of increased pressures against them.

7. In short run, and balancing factors, we believe chances for firm army action to topple Sukarno directly are slim. Action to eliminate Subandrio and other left-wingers and thus break Sukarno's power in two stage process is considerably more likely but odds are probably not much better than 50-50. Nonetheless this is significant improvement over earlier situation.

8. Even if army does not act in short run, longer range prospects are now far more favorable as result student campaign which has ushered in new political atmosphere.

A. Students' enthusiasm and heroism have galvanized heretofore disparate and passive opposition to Sukarno's regime. Several western-oriented Indonesian intellectuals, for example, who had retired completely from political scene, suddenly appeared on streets with students and we have many reports of organized middle-class housewife network for feeding and clothing students and even of spontaneous provision of free food by street merchants and other lower class elements.

B. Students have also torn hole in political doctrine which identified Sukarno with state and which has allowed President to beat off clearly superior forces. Students have shown many of their elders that one can be patriotic without being pro-Sukarno or pro-government. They have done this by adopting causes popular with broad segment of population (lowering of prices and elimination of ineffective managers) and by conducting their campaign in surprisingly orderly fashion which smacks neither of anarchy nor rebellion.

9. In summary, we believe political struggle will be protracted. Student demonstrations are likely to continue for some time despite Sukarno's efforts to suppress them. They will not bring about change in regime in near future unless army joins in openly, and we see only about 50-50 chance for this. Viewed in longer range, however, student demonstrations have begun healthy reorientation of Indo political thinking which will work against Sukarno and can eventually lead to downfall of his regime.

Lydman

 

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

Djakarta, March 10, 1966, 0900Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON. Secret; Immediate. Repeated to Taipei for Bundy. Passed to the White House.

2536. 1. Minister Adam Malik, who seemed to be in higher spirits than I've ever seen him before, told me at rendezvous last night that situation is explosive, with army prepared to move at any moment using 22 army battalions loyal to Generals Nasution and Soeharto in and around Djakarta area.

2. I said I understood Sukarno was planning to dismiss Soeharto. Was this true? He said President was planning to dismiss either or both Soeharto and Adjie; and Malik hoped Sukarno would do so because this would be precisely the action which would incite armed forces to move physically against Presidium and bring about long-needed changes.

3. I remarked that on past occasions when army seemed united in its resolve, Sukarno was able to recapture initiative by calling in all the military brass including regional commanders and putting on one of his performances which seemed to leave military commanders uncertain as to how each other stood and therefore they wavered at the crucial hour. Sukarno has called for such meeting this weekend; will history repeat itself?

4. Malik replied that he did not think it would. All the Panglimas are behind Soeharto only awaiting his order. However, army will not take initial step against Sukarno/Subandrio to avoid chances of being the aggressor, but army action will be in the form of a counter-action. Thus students and laborers will continue their demonstrations until Sukarno/Subandrio provoked into taking some action which will justify army counter-moves. This could be touched off by a dismissal of Soeharto or Adjie or Sarwo Edhie or Mokoginta or by Tjakrabirawa troops shooting students. An example of how close Sukarno is to triggering army move was when he and Subandrio inspected ransacked Foreign Ministry March 9. Sukarno so angry that he ordered Tjakrabirawa troops to shoot at students.

5. Malik continued that even young air force officers are now organized into teams supporting anti-Presidium movement and have plans to sabotage any aircraft engaged in escape of leftist cabinet ministers from Djakarta.

6. Malik said that by far the most important new element in situation since last we met a month ago was student movement against Subandrio and other leftist cabinet ministers. These students more powerful than all parties put together and command much wider sympathy and support. In fact, all previous anti-government movements here have lacked this kind of popular support. Student demonstrators include sons and daughters from most prominent families including those who are in pro-Sukarno camp and they naturally exert considerable influence on their parents. Moreover, soldiers and policemen most reluctant to shoot at student demonstrators. As example, he cited dilemma of one policeman charged with protection of Foreign Office on March 8. When he pointed his gun at a student, he discovered this was son of his superior officer. Policeman so shocked he disappeared from scene. Same has happened to members of Tjakrabirawa battalion, a number of whom have deserted.

7. Additionally, trade unions are getting into the act. Most of trade unions will be supporting students actively by joining in demonstrations and by strikes beginning this week.

8. I asked Malik whether dismissal of Nasution had been serious setback for anti-Subandrio forces. He said not at all; Nasution, who continued to command nationwide respect, could now operate more effectively behind scenes than from office in Defense Ministry. Nasution and Soeharto remained close but it was better to have Soeharto the front man. I inquired about position of General Machmud (Kodam V Commander in charge of Djakarta area). Malik said he was completely with Soeharto.

9. Finally and most importantly, I asked Malik about general security situation as it affected Americans and American property. I pointed out that Subandrio reaction to attacks by students on his Foreign Office and against him personally seemed almost certain to result in his trying to retaliate as well as divert attention. He could not target the army or the students, so it was quite probable he would incite his goon squads against our Embassy. We've already had two examples of that in past two weeks./2/ I also had some rather disturbing reports from unevaluated sources that Sukarno has indicated in his anger that he would do to the Americans what he had done to the British several years ago. This meant danger to our residences as well as the Chancery. What did Malik think of that?

/2/On February 23 and March 8 small, well-organized groups of leftists attacked the U.S. Embassy. There were no injuries and no attackers penetrated the Embassy building. (Telegram 2509 from Djakarta, March 8; ibid.)

10. Malik replied that undoubtedly Subandrio will attempt anti-US actions. However, this will receive no support from overwhelming elements here, and the army will definitely step in to protect the Americans. Malik felt there was no need to evacuate members of American community from Djakarta but suggested that they remain out of sight as much as possible, particularly during next week or so when things likely to be hyper-tense.

11. I told Malik once again that I hoped for a new relationship between our governments, one that was productive and helpful from Indonesia's viewpoint, and that meanwhile it was absolutely vital that nothing occur, such as anti-American actions, which would gravely, if not permanently, injure our relations and eliminate future possibilities for fruitful friendship and cooperation. He said he fully understood my point. He felt the same way. He said he was more assured than ever that things would work out the way we both wanted. Certainly his mood reflected this assurance./3/

/3/In telegram 2564 from Djakarta, March 12, 0150Z, the Embassy reported that a reliable source indicated that the Army was in the process of arresting 20 cabinet ministers. (Ibid.)

12. I asked Malik to feel free to share the burden of our conversation with Nasution and Soeharto. He said he would do so.

Green

 

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

Djakarta, March 12, 1966, 1000Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9, INDON. Secret; Immediate. Repeated to CINCPAC for POLAD, Department of Defense, Canberra, Hong Kong, Kuala Lumpur, Bangkok, London, Manila for FELG, Medan, Singapore, Surabaya, and Tokyo. Passed to the White House, USIA, NSA, and CIA.

2579. 1. Indonesia has just gone through its own peculiar form of military coup./2/ At long last Sukarno has pushed his luck too far, and his plans to dump top army leadership and bring known-Communist in as Army Minister have triggered army action to curb his power. Way coup handled preserves Sukarno as unifying force and establishes army's legitimacy. Army believes both of these are essential. At same time Suharto has in KOGAM order number one/3/ full authority if he chooses to use it.

/2/Telegram 2571 from Djakarta, March 12, contains a preliminary reconstruction of the events of March 11 and 12. (Ibid.)

/3/In this order issued on March 12, the PKI was dissolved and permanently proscribed throughout Indonesia. The order also dissolved and proscribed all organizations based on, protected by, or affiliated with the PKI. Under this order Suharto had authority to act on his own initiative and was only required to report to Sukarno on actions taken. (Telegram 2573 from Djakarta, March 12; ibid.)

2. People of Djakarta are clearly with army. Moderate political parties and other organizations have all issued statements pledging support to Suharto. Students, who created atmosphere which permitted, and in fact forced, army to act, are understandably jubilant. They are roaming through city today on foot and in trucks repeating their slogans against Subandrio, Sumardjo, "Gestapu Cabinet" and high prices.

3. Key now is whether army will move quickly and effectively to consolidate its position. Indications to date are that it will.

A. Parade this morning (septel)/4/ has provided emotional outlet for people after weeks of growing tension, and has demonstrated army's popular support. Whole affair was carefully and effectively staged.

/4/Not found.

B. PKI and all its front organizations were formally banned by Suharto at noon today. While this somewhat academic since PKI has ceased to exist as effective organized party, ban is clear signal that army prepared to go directly against Sukarno's well-known wishes. Army may well now move against PKI elements in Djakarta which has been virtual safehaven for them in past several months. 4. It is not yet clear extent to which army will dominate new government and extent to which it will be willing to share real power with its civilian allies from anti-Communist political parties. However, odds would seem to favor coalition between army and moderate political leaders such as Adam Malik, Sultan of Jogjakarta, and others. Group previously banned by Sukarno and older leaders, some of whom are imprisoned and some merely on shelf, may play role as advisers but we doubt groups which survived and which will play key role in government will be willing to share fruits of their victory and yield important posts to these elements.

5. If army moves to consolidate its position, and we believe odds are that it will, we can probably expect following moves:

A. Major change in cabinet. Subandrio has had it, and other pro-Communists and incompetents can be expected to be replaced. Cabinet will probably be reduced in size and streamlined. There could, however, be deal with Sukarno which would save some of his less obvious cronies.

B. Crackdown on corruption and effort by army to get its hands on illegal funds many of present Ministers have salted away. Serious attention to basic economic problems will probably follow later.

C. Re-evalutation and gradual reorientation of basic foreign policies. Army will end Sukarno's "axis" with Peking and might well drive ChiComs to point of breaking relations. CONEFO is likely to be scrapped. Confrontation with Malaysia will remain on books but likely slowly wither and die as far as serious military action is concerned. At same time, army will be cautious in moving too close to West.

D. Root out political undesirables from positions of authority in army and other military services.

6. Sukarno is still on scene. As long as he is there is danger of comeback but we believe chances of full return to former position are remote. Army has taken first step. If Sukarno again pushes too far, next step against him directly will be far easier.

7. Major government appointments and treatment present ministers will quickly give indication of precise direction government will now take. Government will continue to use many of the old slogans, as indeed Suharto has done in his order of the day (septel)./5/ However, deeds will be far more important than words and it on former basis that government should be judged. As far as USG concerned there are number of immediate issues (Lovestand case, return American journalists, compensation for March 8 attack on Embassy, etc.) which will test GOI attitudes. Early next week when situation hopefully more clear we will send our recommendations for US policy.

/5/Not found. According to telegram 1157 to Djakarta, March 12, responding to telegram 2579 from Djakarta, March 12, the Department noted that "Suharto's reiteration of anti-NEKOLIM slogans and policies, including confrontation suggest he would not welcome overt western support at this point." (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-9 INDON)

Green

 

201. Memorandum From the President's Deputy Special Assistant for National Security Affairs (Komer) to President Johnson/1/

Washington, March 12, 1966, 10:30 a.m.

/1/Source: Johnson Library, National Security File, Memos to the President, McGeorge Bundy, Vol. XXI. Confidential. There is an indication on the memorandum that the President saw it.

Backing up success. It is hard to overestimate the potential significance of the army's apparent victory over Sukarno (even though the latter remains as a figurehead). Indonesia has more people--and probably more resources--than all of mainland Southeast Asia. It was well on the way to becoming another expansionist Communist state, which would have critically menaced the rear of the whole Western position in mainland Southeast Asia. Now, though the unforeseen can always happen, this trend has been sharply reversed.

The coup in Ghana is another example of a fortuitous windfall. Nkrumah was doing more to undermine our interests than any other black African. In reaction to his strongly pro-Communist leanings, the new military regime is almost pathetically pro-Western.

The point of this memo is that we ought to follow through skillfully and consolidate such successes. A few thousand tons of surplus wheat or rice, given now when the new regimes are quite uncertain as to their future relations with us, could have a psychological significance out of all proportion to the cost of the gesture. I am not arguing for lavish gifts to these regimes--indeed, giving them a little only whets their appetites, and enables us to use the prospect of more as leverage.

But my experience is that the bureaucracy will err on the side of caution rather than initiative; hence my suggestion that, in expressing your pleasure to SecState and others over the Indonesia and Ghana coups, you make clear that we ought to exploit such successes as quickly and as skillfully as possible. You have no idea how important a word from you can be in setting the tone for the bureaucracy. And in this case I strongly suspect that my own suggestion is quite in accord with your own political instinct.

If you prefer, I would pass this word to Rusk and Bell; but at the moment there is simply no substitute for direct word from you.

R. W. Komer

 

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

Washington, March 14, 1966.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15 INDON. Secret. Drafted by Meyers and Conlon. Rusk initialed the memorandum.

SUBJECT
Recent Developments in Indonesia

October 1 and Indonesia

1. Although there has been little tangible improvement in the state of our bilateral relations with Indonesia during recent months, recent developments there may eventually lead to significant long-range changes in Indonesia's internal and external policies. There have been several major results of the abortive October 1 coup attempt including: 1) the decimation of the PKI as an organized political force; 2) a severe strain in Sino-Indonesian relations; and 3) the emergence of new forces that are articulating demands that run counter to President Sukarno's fundamental philosophy and the way he has been governing.

Background to Recent Developments

2. During the five months that followed the September 30 attempt, President Sukarno and Foreign Minister Dr. Subandrio jockeyed with the military for political advantage. On February 21, Sukarno announced his decision to reshuffle his cabinet in order to cut the ground from under the military leaders who were offering the greatest threat to his power. Eliminated in the shuffle were several prominent non-communists, including Defense Minister Nasution, while all of Sukarno's known leftist advisers were retained. This triggered a mass reaction. During the February 22-March 12 period, thousands of students demonstrated almost continuously in the streets of Djakarta demanding the banning of the PKI; ouster of Subandrio; and reduction of prices. During the past week they occupied and ransacked the Indonesian Foreign Ministry, forced the Education Ministry to close its doors, and violently attacked the offices of the New China News Agency, Chicom Consulate General and the Chicom Trade Mission in Djakarta, injuring several Chinese in the process.

3. In weak counterpoint to these large demonstrations were two raids staged on February 23 and March 8 against the U.S. Embassy by small but well-organized groups of leftists. No one was injured, nor was the Embassy building penetrated by the attackers.

The March 12 Affair

4. In a supreme effort to blunt the impact of the student demonstrations Sukarno scheduled a series of three meetings over the weekend of March 12 that were intended to divide and eventually conquer his opposition. The military, however, reportedly concerned by reports that Sukarno planned to replace Suharto with a leftist general responded by handing Sukarno an ultimatum. In response to the ultimatum, Sukarno transferred responsibility for maintaining security to the Army. Since that time Suharto has been issuing decrees "on behalf of" Sukarno. A cabinet reorganization is in progress and early indications are that Subandrio and other leftists will be out.

The Future/2/

/2/INR Director Hughes sent Rusk Intelligence Note no. 154, "The Situation in Indonesia," March 14, which stated that the army, although prepared to restore security and revamp the government, was unlikely to assume the leading role in the government. Hughes also suggested that "Sukarno's submission to army pressures is probably only a strategic retreat and he can be expected to attempt a comeback after a short time." (Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65-6/66)

5. While the final resolution of the ongoing power struggle is not yet certain, it would appear that the military has for the moment regained the initiative. Their eventual success or failure depends largely on their ability to: 1) retain their present momentum; and 2) maintain internal unity within their own ranks. We will, of course, be watching the development of the situation to see how we can adjust our relations with a hopefully more moderate Indonesian government. We will also be examining the advisability of some form of economic aid, at an appropriate time.

6. The final question mark is Indonesia's newest political power group--the students. Although they will side for the moment with the military, they may in the long run prove to be Indonesia's most significant "new emerging force."

 

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

Washington, March 17, 1966, 6:53 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) INDON. Secret; Priority; Limdis. Drafted by Cuthell; cleared in draft with Barnett, Vladimir Toumanoff, Officer-in-Charge of Multilateral Political Relations (EUR/SOV), and Poats; cleared by Mann and Richard W. Petree, Officer-in-Charge of Japanese Affairs; and approved by Bundy. Also sent to Tokyo and repeated to Moscow, Bonn, Paris, The Hague, Kuala Lumpur, and Hong Kong. In a note to Komer, March 18, Thomson reported that this cable went out without White House approval and was the "end product of a reluctant and hand wringing approach to contingency planning" strongly encouraged by the NSC staffers. Although "irked" by some preemptory judgments, Thomson "welcomed even this bit of glacial progress on the part of the Department." Thomson concluded, "Clearly the Japanese are being set up as our front men, and I suppose that makes sense." (Johnson Library, National Security File, Country File, Indonesia, Vol. VI)

1173. Ref: A. Djakarta's 2628 (Notal); B. Djakarta's 2633/2/ (Notal).

/2/Both dated March 16. (National Archives and Records Administration, RG 59, Central Files 1964-66, FN 14 INDON and POL 23-9 INDON, respectively)

1. Following is our current assessment as to how Indo situation likely develop and summary our current thinking as to nature of US response to Indo requests for assistance, which seem to be inevitable and probably in near future.

2. We do not expect either return of Sukarno/Subandrio to real power or rapid emergence strong, economy-minded regime in near future. Even if new moderate government emerges along lines para 5 ref B,/3/ it will likely represent compromise between various remaining elements of Indo power structure, collectively concerned about problem of establishing itself in effective control over country, and both unwilling and unable to take dramatic or surgical action on Indonesian economy. We assume Sukarno would preserve at least titular power, and that effective exercise of responsibility by new regime will be limited by a felt need to keep him reasonably happy through at least continued lip service to Sukarno's official mythology for sake of maintaining continued national unity.

/3/In paragraph 5 of telegram 2633 from Djakarta March 16, Embassy suggested that, "there would almost certainly be an eventual rehabilitation of old pro-Western elements like Masjumi and PSI but probably under different names." Leaders like Malik, Suharto, and Nasution would probably play a key role.

3. Government of this sort is likely to be aware of and concerned about basic economic problems of Indonesia, but will feel that it must get through months ahead with palliative help from outside rather than by taking on basic problems. Expect it will, for example, not dare make significant reduction in size of civil service or army.

4. This government likely make complicated series of bilateral appeals through the usual traveling teams and through foreign ambassadors in Djakarta for food and fibers and for debt rescheduling and new credits overtly from Japanese and Europe, and, at least initially, covertly from us.

5. When approached by Indonesians we might react as follows:

A. US interest in giving help depends on some showing that a constructive Indonesian government is establishing itself firmly in power desiring to pull country out of its present economic shambles. We are ready to help such a government out with rice and cotton on terms which Indos could advertise as commercial but which are in fact very concessional (along lines Ambassador Green's discussions in Washington, using mechanisms like PL 480 and CCC guaranty).

B. Concealment is impossible for us. We do not desire embarrass GOI or give erroneous impression that we are trying to move back into Indonesian scene, but fact of life is that any real role we can play in helping Indos will be public knowledge.

C. With respect to debt rescheduling or other aid apart from above immediate food and fiber relief, following considerations apply:

i. We feel that support for Indos other than limited emergency measures can only be effective or possible politically on multilateral basis.

ii. Our thought is that one or more nations friendly to Indos--such as Japan--should be asked by Indos to take lead in arranging meetings of creditor and perhaps other interested countries to analyze debts and need for cash and credits during months while GOI is attempting to reverse present deterioration and to establish itself, and to decide how to proceed collectively in helping Indos out of predicament. We would be glad to participate.

iii. Problem of Indo situation is international, and action taken must involve equality of treatment of creditors, for which reason we believe it important attempt secure participation USSR. We and other creditors could not, for example, accept an arrangement on credits and debt rescheduling which simply freed Indo assets to service Russian debt. We believe Russians should be asked to participate in aid meetings (ii. above) even though they may well refuse attend.

iv. We are willing to help GOI but we cannot do so if GOI continues to hammer at us as its greatest enemy, is pursuing military confrontation or confiscates US oil properties. These are not onerous preconditions and we would not ask sharp changes in public policy of sort which might endanger GOI existence.

6. We have it in mind that early if not first Indo request for support will be to Japanese in course visit frequently deferred Indo economic mission. When we and addressees have reached agreement as to US position we believe we should review it in some detail with Japanese, both to correct view reported para 4B ref A and to help Japanese prepare respond to Indo request for aid. Action addressees requested comment soonest on foregoing and on other aspects of problem they may wish raise./4/

/4/In telegram 2682 from Djakarta, March 19, Green judged the Department's analysis and proposed response to Indonesian requests for aid to be "excellent." (National Archives and Records Administration, RG 59, Central Files 1964-66, AID 1 INDON)

Rusk

 

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

Washington, March 22, 1966, 8:50 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 1 INDON. Secret; Limdis. Drafted by Cuthell, cleared with Deputy Assistant Secretary of State for European Affairs Walter J. Stoessel, Jr., Deputy Assistant Secretary of State for International Organization Affairs David H. Popper, Barnett, Ewing, and Officer-in-Charge of Japan Affairs Richard W. Petree. Repeated to Bangkok, Bonn, Canberra, The Hague, Hong Kong, Kuala Lumpur, London, Manila, Moscow, Paris, Rome, Tokyo, Wellington, CINCPAC for POLAD, and USUN.

1182. 1. As new Indonesian government attempts to build up international support for Indo economy fact that GOI has cut itself off from almost all international organizations will present growing problem. We assume that responsible people like Sultan and Malik aware of need to re-join the world, but that they will feel need to proceed slowly and to avoid challenging Sukarno decisions directly.

2. We believe Indos should be encouraged to start reentry into at least those organizations which can help them directly or through coordination multilateral assistance. We expect GOI will be receiving advice to this effect from other countries they are or will be approaching for help, but think it would be unwise for USG to take initiative with Indos as they likely both to suspect our motives and to assume our interest indicates they have new bargaining asset with us.

3. At same time, Indos will probably worry about our reaction if they attempt either rejoin any of organizations they have left or join others they have not been in, notably Asian Development Bank. If feelers put out indicating such concern, believe you should make clear we would support Indo applications quietly and would not seek exploit their action as western victory. If your advice sought, you might suggest that Indo statement of intention join ADB (with which GOI has no history) could be useful opening gambit.

4. Foregoing position is, of course, based on our conclusion that Indos should be drawn back into real world, that they likely prove unreliable and often unfriendly voice and vote, but that importance of former outweighs risk of latter.

5. Djakarta comments requested./2/

/2/In telegram 2732 from Djakarta, March 24, the Embassy agreed it was in U.S. interest to draw Indonesia back "into the real world" by joining useful international organizations and that the United States should remain in the background. (Ibid.)

Rusk

 

205. Memorandum From James C. Thomson, Jr., of the National Security Council Staff to the President's Special Assistant (Moyers)/1/

Washington, March 31, 1966.

/1/Source: Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65-5/66. Secret. Copies were sent to Bromley Smith, Executive Secretary of the NSC, and to Edward Hamilton of the NSC Staff.

SUBJECT
Rice for Indonesia

I have just learned that the President has instructed the Secretary of State to move ahead on the attached proposal for the one-shot emergency shipment of 50,000 tons of rice to Indonesia under PL 480 Title IV./2/

/2/Rusk informed British Ambassador Dean of this decision in a meeting on March 31 and Berger informed Australian Ambassador Waller in a meeting the same day. (Memoranda of conversation, March 31; National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) 15-6 INDON and AID (US) INDON) Thomson sent Rostow a background paper describing Assistant Secretary of State for Congressional Affairs MacArthur and his staff's briefings of key Congressional leaders about the impending decision on rice. All the briefed Congressional leaders either approved or had no objection. (March 31 attachment to a note from Thomson to Rostow, April 2; Johnson Library, National Security File, Country File, Vol. VI, 11/65-5/66) The proposal was attached, but is not printed.

This decision makes good sense. At the same time, however, I thought you--and perhaps the President--should be aware of some of the additional factors surrounding this recommendation:

1. There is a continuing argument between advocates of a PL 480 route and advocates of a straight export credit sale arrangement (with CCC guarantee of a letter of credit from the Bank of Indonesia). In the present decision, the PL 480 advocates prevailed on the grounds that such an arrangement would be speediest and would avoid a CCC guarantee of an apparently bankrupt bank. There is a question, however, whether this arrangement will be satisfactory to the Indos who would prefer a less conspicuous U.S. Government involvement and would probably regard the CCC route as the less conspicuous of the two.

2. A third route was also considered: U.S. financing of Thai rice for Indonesia. This, however, would have involved use of Supporting Assistance funds and, according to our lawyers, a Presidential Determination (under the Broomfield Amendment) that aid to Indonesia was in our national interest. Such a step would become public and would probably be an embarrassment to the Indonesians at this juncture.

3. The PL 480 route has some worrisome implications for the future: as you may know, cotton dealers have been attempting for some months now to obtain CCC guarantees for Indo letters of credit in order to push the sale of raw cotton to Indonesia./3/ Such dealers--and their supporters on the Hill--are apprehensive that the Government may opt for a PL 480 provision of cotton, rather than straight commercial sales under CCC guarantees. Our action on rice will increase the apprehensions of the cotton people and their supporters on the Hill.

/3/Komer sent President Johnson a March 28 memorandum in response to a query from a lawyer friend of the President's, who was writing on behalf of client (a Texas cotton company and cotton growers cooperation). Komer explained that since the Bank of Indonesia was virtually bankrupt, a Commodity Credit Corporation (CCC) guarantee of cotton sales was tantamount to direct U.S. assistance. The chances of default by the bank were extremely high. To add to the problem, top Indonesian leaders like Suharto and Nasution had been saying for the past 6 months that they wished to avoid anything that looks like overt U.S. Government aid. For these reasons the Departments of State and Agriculture rejected the CCC arrangement. (Ibid., Memos to the President, McGeorge Bundy, Vol. 21, March 1966)

James C. Thomson, Jr./4/

/4/Printed from a copy that bears this typed signature.

Volume XXVI Index 


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