856D.10/6–2851: Telegram
The Ambassador in Indonesia (Cochran) to the Secretary of State
1838. Parliament June 27 ratified loan agreement amount $52,245,500 concluded between Export Import Bank Indo January 12, 1951. Vote 69 to 25 with Leftist Parties and Indo Socialist Party against. Only 110 total 230 present night session when vote taken.
Parliament debates loan agreement included Communist spokesmen charge loan violates Indonesian independent policy, objections agreement negotiated by Indonesian Embassy Washington, and resentment [Page 684] Parliament not consulted terms agreement and use loan. Head Parliamentary Comite which reported out loan objected Parliament presented with fait accompli and raised serious specific inquiries re agreement. These included whether means could not be found reduce Indo dependence American businessmen, shipping and insurance companies in implementing loan; whether imports under loan would be monopolized by Dutch big five importers Indo; whether agreement standard contract or especially favorable Indo; what steps govt prepared take view Export Import Bank inability procure priorities, licenses for goods financed by loan; and why Indo required submit progress reports to instrument foreign govt when only important consideration whether loan repaid.
In reply Min Finance Wibisono stressed Indo need foreign loan, said Russia had accepted loans from England US, stated Indonesian businessmen would participate import goods financed under agreement and said report required by bank were [was] in substance guarantees for loan repayment. Said govt disappointed bill only now discussed Parliament and said result this delay Export Import Bank had postponed consideration other projects. He defended executive right conclude loan agreements and said US officials could be approached obtain procurement priorities. He said foreign exchange permits totaling $35 million had been issued for imports which govt hoped finance by Export Import loans but added permits totaling only $18 million had been utilized to date view procurement difficulties.