756D.5 MSP/7–1452: Telegram
No. 208
The Secretary of
State to the Embassy in
Indonesia
83. 1. Pursuant views expressed Deptel 70 Jul 15 and in response your request (Embtel 70 Jul 14 sec 4) for pertinent instrs, Dept notes Indo FonMin stated in mtg Jul 11 that he favors continuation US aid, that Zain came to mtg with draft “neutral” ltr as basis for continuation US aid, and that “question still open as to sending ltr of neutral type as drafted by Zain”. Dept believes Indo problem re continuation Amer econ and technical aid may be solved through use Note similar to above ltr in which Indo Govt wld give assurances which without specific mention MSA or sec 511 wld be acceptable to US Govt under sec 511 (b) along line Burma agreement (Deptel 823 Feb 4).1 Such Note wld be adequate to permit continuation of TCA program under sec 511 (b) regardless of continuation Indo Jan 5 agreement under sec 511 (a). Suggested draft acceptable Note follows:
“Excellency: I have honor to refer to US Govt Note Jun 30 and to subsequent conversations between reps of our Govts relating to effect of recent legis by Cong upon auth of US Govt to continue furnishing assistance under Econ Coop and Technical Assistance Agreement with Republic of Indo (RI) signed Oct 16, 1950. It is noted that auth of Mutual Security Agency of US Govt has been modified to permit that Agency administer only programs of econ assistance which are designed to sustain and increase mil efforts in countries receiving US grant mil assistance or which are necessary carry out mutual defense programs. It is consequently understood that MSA no longer authorized administer econ and technical aid program in Indo. It is noted that US Govt is prepared continue making available to Indo technical aid for econ development under Act for Internatl Development which is administered by Technical Coop Admin (TCA) of US. It is further noted that in US Govt’s view econ and Technical Bilateral Agreement Oct 16, 1950 between our Govts wld be adequate to cover extension technical aid by TCA, apart from some possible minor technical modifications.
“Indo Govt plsd to advise US Govt that arrangements referred to above are acceptable.
“In this connection, Indo Govt reaffirms it will act in conformity with its obligations under UN Charter and in accordance with principles and purposes of UN Charter in promoting internatl understanding and goodwill, and maintaining world peace and eliminating causes of internatl tension.
“Pls accept, Excellency, renewed etc.”
2. Dept notes that Indo Govt intends to seek “further clarification” with Amb Cochran. When this clarification is sought, or more immed in response to above proposal made by Zain, Amb is requested inform Indo Govt substance para 1 above, unless Amb perceives strong objection.
3. Dept notes further (reftel sec 4) Emb belief Indo Govt will face attack if it “repudiates” US aid in situation “for which at least police equipment urgently needed”. If Indo Govt were to shift from 511 (a) to 511 (b) with US consent, this of course wld not constitute “repudiation”, and Indo Govt wld be able to defend its action by pointing out that shift wld not in itself affect availability Amer mil assistance, either with regard to priorities (Deptel 1290 June 5 [6]) or Indo eligibility for reimbursable aid (Deptel 1330 June 17)2 although shift wld of course require term grant mil aid. If Emb considers Indo Govt has any misunderstanding this subj, pls attempt clarify.