Foreign Relations of the United States, 1955–1957, Southeast Asia, Volume XXII

262. Report Prepared by the Ad Hoc Interdepartmental Committee on Indonesia for the National Security Council¹

Washington , September 3, 1957 .

SPECIAL REPORT ON INDONESIA

The Implication for U.S. Security of Recent Developments in Indonesia, Especially Communist Political Gains in Java

1. Should the Communists gain effective political control of the Central Government or at least of the Island of Java or both, U.S. security interests would be seriously affected:

a. In the short run the most important implications of a Communist takeover on Java would be psychological and political. The general position of non-Communists in Asia would be weakened as the non-Communist states of Southeast Asia would feel themselves squeezed between Communist China and Communist Viet-Nam on the north, and Communist Java on the south.

b. In the long run the military implications would be grave as, from bases on Java, bloc military forces could threaten directly Malaya, Singapore, British Borneo, the Philippines, New Guinea, and Australia.

2. Should the Communists eventually gain control of the Indonesian archipelago, in addition to the consequences stated in a and b above, the U.S. strategic posture in Southeast Asia and the Southwest Pacific would be jeopardized. Communist control of Indonesia would split off Australia and New Zealand from Southeast Asia and would sever sea lines of communication and hinder air communication between the Pacific and Indian oceans. Additionally, it would make very difficult the provision of U.S. military support to Laos, Cambodia, Thailand, Viet-Nam and Malaya. Control of Indonesia by the Communists would be an encroachment into the Pacific offshore island chain (Japan, the Ryukyus, Taiwan and the Penghus, the Philippines, Australia and New Zealand) which current U.S. policy describes (NSC 5429/5, paragraph 5a²) as an element essential to U.S. security. Furthermore, the Communist bloc would benefit from the exploitation of Indonesia’s oil, rubber, and tin; these resources could also be denied as an economic warfare measure to the discomfort of the Free World.

Summary Approaches by the United States to Present Indonesian Situation

4.³ The United States is faced with three possible approaches:

a. To continue the present programs in the hope that Communist gains per se will arouse and unify non- and anti-Communist counter forces sufficiently to reverse the trend of the growth of Communist power.

b. To terminate our aid programs in the hope that such action will shock the non- and anti-Communists into action against the Communist forces.

c. To continue the present pattern of our formal relationships with Indonesia, but so to adjust our programs and activities as to give greater emphasis to support of the anti-Communist forces in the outer islands while at the same time continuing attempts to produce effective action on the part of the non- and anti-Communist forces in Java.

Approach c has the greatest promise of achieving U.S. objectives.

Bases for U.S. Planning

5. The following factors provide the principal bases for U.S. planning:

a. Sukarno, who remains a key figure in Indonesia, has become increasingly identified with the PKI.

b. The Indonesian Communist Party, whose capabilities have increased rapidly during the past year, has by far the most solid and effective political organization in Java.

c. The non-Communist forces throughout Indonesia, while disparate and of differing motivation, are still in a numerical majority. However, they are far stronger on the outer islands than on Java.

d. The Army on Java is rapidly becoming less reliable politically because of the removal, in many cases calculated, of anti-Communist officers from positions of influence, particularly control of troop units.

e. Although our long-term programs on Java will in themselves not have a decisive impact or a decisive effect in the present worsening circumstances, their continuance… can provide the framework and support for an all-inclusive program to unify the as yet substantial but still unorganized non- and anti-Communist elements there.

Recommendations

6. Since the most promising approach at this stage for the United States lies in exploiting the not inconsiderable potential political resources and economic leverage available in the outer islands, particularly in Sumatra and Sulawesi (Celebes), we should, to utilize and develop this asset in accordance with paragraph 12 of NSC 5518:

a. … strengthen the determination, will and cohesion of the anti-Communist forces in the outer islands, particularly in Sumatra and Sulawesi, in order through their strength to affect favorably the situation in Java, and to provide a rallying point if the Communists should take over Java.

b. …

c. Utilize such leverage as is available and may be built up by the anti-Communist forces in the outer islands to continue our efforts to try to unify and stimulate into action, singly or in unison, non- and anti-Communist elements on Java against the Communists.

7. Despite the fact that our courses of action thus far have been unsuccessful in stemming Communist growth on Java, our best course of action to contribute to the establishment of a government able and willing to pursue vigorous anti-Communist domestic policies and actions is to:

a. Promote effective action singly and jointly among non-Communist elements, particularly the Masjumi, the NU, and the PNI, against the Communists.

b. Seek to prevent the growth of the military potential of the government military forces on Java, as these may ultimately fall under Communist influence and be used to reduce the anti-Communist forces in the outer islands. However, … support the non- and anti-Communist elements in the military and paramilitary forces on Java and in the Central Government.

c. Induce within Java a psychological awareness of the menace of Communism on Java by utilizing, among other things, the following themes as appropriate:

• (1) Identify the PKI with the Sino-Soviet bloc and in this connection stress the roles of the Soviet and Communist Chinese Embassies.
• (2) Emphasize the extent of Communist influence and control of Sukarno.
• (3) Identify the PKI, Sukarno or both as the cause for the growth of tension between the outer islands and Java.

d. Utilize these and similar themes as appropriate and feasible elsewhere in Indonesia and in the world to focus world public opinion on the Communist menace on Java.

8. There is little possibility at this time that the abrupt termination of our economic and information programs in Indonesia would assist in either spurring the non-Communists into effective action against the Communists or weakening the Communists. On the other hand, there is a strong probability that their abrupt termination would strengthen the Communists and discourage non- and anti-Communists on Java. Therefore, it is recommended that these programs in Indonesia be handled on the following principles:

a. For the time being there should be no official indication that we are reconsidering our policies.

b. Unless and until Communist strength declines on Java, our technical assistance program and all our economic development programs should be oriented toward the outer islands. (For information as to type of action which might be taken under this paragraph, see Annex A.)

9. …

10. For the time being our official diplomatic relations with Indonesia should be maintained as near as possible to what they have been in the recent past.

. . . . . . .

1. Source: Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5518 Series. Top Secret. The Ad Hoc Interdepartmental Committee on Indonesia was established pursuant to NSC Action No. 1758 (see footnote 3, Document 240). The report was circulated to NSC members with a covering memorandum of September 6 from Lay and a letter of September 3 from Hugh S. Cumming, the committee chairman, to Lay. Cumming’s letter noted that the committee had held seven formal meetings, at “practically all of which” representatives were present from the Departments of State and Defense, Joint Chiefs of Staff, Central Intelligence Agency, International Cooperation Administration, National Security Council, and Operations Coordinating Board. The letter also stated the committee suggested updating NSC 5518 in light of any action the NSC might take on the report.

   Annex A, entitled “Types of Action Which Might Be Taken Under 8b Regarding Economic Development and Technical Assistance Programs”, and four appendices, entitled “The Implications for U.S. Security of Recent Developments in Indonesia, Especially Communist Political Gains in Java,” “Economic and Technical Assistance Programs in Indonesia,” “USIA Operations in Indonesia,” and “Educational Exchange Program, Indonesia,” are not printed.

2. For text of NSC 5429/5, December 22, 1954, see Foreign Relations, 1952–1954, vol. XII, Part 1, p. 1062.
3. There is no numbered paragraph 3 in the source text.