165. Telegram From the Department of State to the Embassy in Indonesia1
130. Your 159, 199.2FYI Indonesia has approached Fund for $27.5 million drawing (this equals their recent payment to Fund) plus $50 million standby credit. US Fund Director believes most likely basis agreement in Fund at least for present is total drawing about $55 million rather than $27.5 drawing plus $50 standby. This depends on willingness Indonesia reduce its request from $77.5 million.
Indonesian suspension payments to Netherlands is potentially troublesome question particularly in view Dutch sensitivity. Dutch Executive Director IMF asked Fund urge Executive Director for Indonesia make statement clarifying status Indonesian suspension payments under RTC. Because Fund management unwilling do this, [Page 286] Dutch Director asked his Government authority raise issue forcefully in Executive Board when RI drawing considered. US Director, after consultation Department, informed Indonesian Director July 16 he would be willing support drawing about $55 million but urged him impress upon Indonesian authorities importance their making some kind clarifying statement designed ease tensions this issue.3 End FYI.
Appreciate any information available but other Embassy action not desired.
- Source: Department of State, Central Files, 856D.10/7–2256. Limited Official Use. Repeated to The Hague. Drafted and approved in OFD and SPA; cleared with WE and, in substance, with the U.S. Executive Director for the IMF, Frank A. Southard.↩
- Telegrams 159 and 199 from Djakarta, July 17 and 22, reported that Indonesia had requested a $50 million loan from the International Monetary Fund. (Ibid., 856D.10/7–1756 and 856D.10/7–2256)↩
- On July 31, the IMF Executive Board approved an Indonesian request for a drawing of $55 million after the Indonesian Director stated that his government was giving serious consideration to the question of Indonesian debts to the Netherlands. (Memorandum from George L. West to Elbrick, August 13; ibid., 856D.10/8–1356)↩