The Secretary of State to the Embassy in Indonesia
864. Eyes alone Cochran from Lacy. Soedjatmoko1 in informal conversation with Dept officer today showed excitement over “rumor” that Dept reconsidering ECA grant aid program Indo. Without comment on Indo need or lack of need for program, he strongly emphasized obvious prediction that if aid cut off in abrupt or even slightly tactless manner, leftists will gain great polit capital expense US. He implied PNI, PKI, etc will charge US cut off econ aid as punishment for Indo’s “neutral [position?]” in UN. He further claimed termination program wld shake many moderate Indos confidence in US friendship for Indo.[Page 597]
Since ECA reply Dept recommendations (Deptel 855, Feb 14) not yet recd, final Washington decision on FY 51 and 52 ECA programs Indo not yet reached.
In view foregoing evidence that Indos here aware current discussions re ECA program, Merchant plans call in Indo Amb2 Feb 19 describe character of tentative consideration now being given ECA program, taking line of Deptel 855, Feb 14 with particular attn items (a) through (e) as evidence strength continuing US friendship for Indo.
Despite Soedjatmoko’s fears, Dept believes on basis of evidence recd in past few months that US risks more polit loss by continuing than by terminating program, particularly if termination done correctly in Indo eyes. Dept wld probably announce termination in statement containing congratulations Indos on greatly improved fin position which decreases need for continuing large scale US econ aid. It wld further be pointed out that program continuing through FY 51 with approx $9 mil specific projects and that program continues include technicians requested by Indo Govt under White contract.
You authorized hold similar conversation with Roem or other appropriate official Djakarta when necessary.3
Report immed (1) ur estimate validity fears such as raised by Soedjatmoko, (2) ur suggestions best method present termination program, if so decided, to Indos, (3) ur suggestions as to above approach and any other matters that shld be raised with Indo Amb here. [Lacy.]
- M. Soedjatmoko, Counsellor of the Indonesian Embassy in the United States.↩
- Dr. Ali Sastroamidjojo.↩
- In telegram 867 to Djakarta, February 16, which is not here printed, Ambassador Cochran was instructed not to hold conversations with Indonesian officials regarding the termination of ECA aid to Indonesia until he had received further instructions (856D.00–TA/2–1651).↩