Foreign Relations of the United States, 1955–1957, Southeast Asia, Volume XXII

79. Telegram From the Embassy in Indonesia to the Department of State²

Djakarta, January 19, 1955—10 a.m.

1160. Please pass Stassen and Moyer from Jones. At dinner Jones’ house last night Djuanda expressed his views quite frankly on several aspects situation here. On political side he emphasized present cabinet stronger than ever and he foresaw no likelihood of change before elections, which he predicted would be held August. He recognized present cabinet is playing with fire in giving Communists free rein; Prime Minister³ and Foreign Minister⁴ among others in PNI shared this view. Unfortunately, present government had no alternative since cooperation of Masjumi or PSI unobtainable on any basis mutually acceptable. He inferred efforts to draw both parties into cabinet had been tried and failed. Sjahrir,⁵ for example, had agreed cooperate with PNI on one condition that he be made Prime Minister; he would, Djuanda said, accept no other position in cabinet. Masjumi had likewise failed respond to conciliatory advances on part PNI. Djuanda emphasized therefore that opposition must share blame for continuance present unsatisfactory, uneasy situation in which cabinet depends upon Communists for its existence. He also pointed out dangers involved Masjumi majority in election which, if Masjumi turned in direction theocratic state, would not only seriously upset Christians and other minorities but would have tendency drive PNI and PKI close together in opposition with resultant strengthening of Communists.

Djuanda introduced somewhat obliquely subject of increased economic aid Indonesia, saying he recognized US could not in light established policy give substantial assistance to government depending on Communist support and would await Indonesian election results before committing itself. While understanding necessity for this, he regretted it in light deteriorating economic situation here and great need outside help.

Djuanda further observed he had been waiting ever since meeting Stassen⁶ for some clarification US program aid Southeast Asia, particularly with reference (a) whether Colombo plan⁷ would be used as channel for distribution such aid, (b) thinking with respect combination US and European assistance. On latter point he said Indonesia would be seriously embarrassed if US-European organization formed to distribute aid Asia since obviously Dutch would be included in group and Indonesia could not be in position accepting aid from Dutch even indirectly. While not commenting on former, he admitted that multilateral approach economic aid would make acceptance by Indonesia politically much less difficult if multilateral approach not complicated by presence Holland.

Djuanda strongly criticized policies of Ministry Economic Affairs and said he had been called in by Prime Minister recently to advise trade and fiscal policy. He hoped substantial changes such policies might gradually be brought about. He particularly criticized bilateral approach to trade carried on by Economic Ministry and emphasized parallel transactions were having most unfortunate effect.

Djuanda has agreed be candidate for constituent assembly representing recently reorganized version his old party, which was banned by Japanese. He stressed, however, in so doing he was not joining party but retaining his position as Independent and non-party member.

Next following telegram contains my comments.⁸

Cumming

2. Source: Department of State, Central Files, 756D.00/1–1955. Secret.
3. Ali Sastroamidjojo.
4. Sunario.
5. Soetan Sjahrir, Prime Minister of the Republic of Indonesia, 1945–1947.
6. Presumably this meeting took place during Djuanda’s visit to Washington in late October and early November 1954. Telegram 587 to Djakarta, November 5, 1954, reported that in a private conversation with Moyer, Djuanda had expressed interest in increased U.S. aid if it would not necessitate agreements of a kind that would cause political difficulties in Indonesia. (Department of State, Central Files, 756D.5–MSP/11–554)
7. The Consultative Committee on Economic Development in South and Southeast Asia, of which both the United States and Indonesia were members.
8. Infra.