The Acting Secretary of State to the Embassy in Indonesia
908. Rusk today informed Indo Amb that in view increasing US defense expenditures ECA programs which are current scheduled for annual routine consideration by Budget Bureau and Congressional Appropriations Committee expected to receive severe examination. In respect each recipient country particular attention probably will be paid to: 1) its financial and foreign exchange position, 2) evidence that ECA program being received with sympathetic interest.
Rusk made it clear current study applies only ECA programs and due only to necessity US budgetary justification. He emphasized that consideration bears no relation, for instance, to Indonesia’s voting in UN, although he might like to discuss this and other aspects Indo’s [Page 607] broad foreign policy other occasion. Rusk asked Ali’s views on applicability above criteria ECA program Indonesia.
Ali replied he understood how impressions might arise, through delicacy with which his Govt has to handle difficulties with Indo parliament and disorderly elements in Indonesia, that ECA program not being warmly received. He stated with emphasis, however, that his Govt strongly desires continuance ECA program, and that despite housing difficulties, it desires receive Amer technicians (provided they are tactful and understanding) in limited numbers, if available. He added he had heard rumor about 2 weeks ago that US Govt considering cutting off all economic aid. These rumors disturbed him and he cabled his Govt [but?] he will now correct.