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

337. Memorandum From the Deputy Assistant Secretary of State for Far Eastern Affairs (Jones) to the Secretary of State¹

Washington, December 27, 1957.

SUBJECT

• Situation in Indonesia as of December 27

There follows a summary of the latest developments in the Indonesian situation:

1. Recent statements by Indonesian leaders spell out clearly the determination of the Indonesian Government to continue on its present course of action designed to reduce and in the long run eliminate Dutch economic control of the country. It is estimated that about 10,000 Dutch nationals will have departed between December 1 and December 31. The departure of the Dutch appears to be proceeding in an orderly manner with few or no incidents of personal violence. No U.S. property or nationals have been molested.

2. Indonesian officials continue to show a readiness on the part of Indonesia to talk over outstanding issues with the Dutch provided these include West New Guinea. Foreign Minister Subandrio confidentially informed Ambassador Allison on December 23 that West Germany had been using its good offices in this matter and that he was cautiously optimistic about prospects for exploratory talks between the Indonesian and Dutch Prime Ministers. The Netherlands Foreign Minister Luns has indicated that the Dutch Government was still prepared to discuss Dutch-Indonesian problems with Indonesia but that the basis for such talks was becoming “very narrow”. On December 23 the Netherlands transmitted to members of the United Nations Security Council and General Assembly a protest against the “hostile campaign” in Indonesia against Dutch nationals and property.

3. The most pressing problem faced by Indonesia is the severe deterioration in the economy resulting from the anti-Dutch campaign. Rice shortages created by a breakdown of distribution facilities and hoarding have greatly raised rice prices in several areas.

4. Subandrio confirmed to Ambassador Allison that President Sukarno would depart on January 6 for a “rest” trip to India, Egypt, Pakistan, Ceylon, Burma, Thailand and Japan. Subandrio added the trip would last about four weeks.

5. A high-level military equipment purchasing team will depart Indonesia next week for Yugoslavia, Czechoslovakia and Poland. Indonesian sources have leaked to a New York Times correspondent in Djakarta the story that Indonesia was sending this purchasing mission to Eastern Europe as the result of no action on the part of the U.S. to reply to an Indonesian request to purchase U.S. military equipment.

6. As you know, we are preparing a note of protest regarding the Indonesian claims to what we consider to be the high seas.²

Comments

1. The internal Indonesian political situation continues in an extremely fluid state. While there is no firm evidence that Sukarno’s trip is other than for health reasons, the absence of Sukarno may pave the way for political changes. There is evidence—although far from conclusive—of rapprochement between the Indonesian Nationalist Party (PNI) and the Moslem Masjumi Party which might lead to a new, stronger, non-Communist coalition government. There are also indications that the Army is preparing to take firmer measures to counter the activities of Indonesian Communists.

2. The extreme economic dislocations augur an increased civil unrest which would undoubtedly present the Indonesian Communists with an opportunity to enhance their position in the country and particularly on Java. It also appears a very likely possibility that to the degree that assistance from Free World countries is not forthcoming, Indonesia will turn to Communist bloc countries to fill the economic vacuum created by the departure of the Dutch and to obtain equipment for its armed forces.

3. The U.S. still maintains some good will in Indonesia although our Embassy at Djakarta reports that U.S. influence has been on the wane in the past few months. Any U.S. support of the Dutch position in this dispute will very seriously reduce what U.S. influence remains in Indonesia.

EUR Comment

On the other hand, failure to support legitimate Dutch interests, particularly where they are justified in equity or international law, will of course serve to weaken our leadership of the Western alliance.

Concurrence:

EUR—Mr. Torbert with additional comment noted above.

1. Source: Department of State, Central Files, 856.56D/12–2757. Secret. Two attachments are listed on the memorandum, but neither was filed with the source text. Tab A is Irwin’s letter to Secretary Dulles, Document 335. Tab B is a memorandum by Herter of a telephone conversation on December 20 with Assistant Secretary of Defense Sprague, during which Sprague expressed interest in undertaking preliminary planning for possible military assistance to Indonesia. He stated that “in view of the shifting situation in Indonesia and the possibility that Soekarno might pull out, Defense would like to be in a position to move rapidly should a subsequent decision in the light of changed circumstances be made to give military assistance”. Herter agreed that such preliminary planning would be desirable. (Department of State, Central Files, 756D.5–MSP/12–2057)

2. On December 13, the Indonesian Government declared that “all waters around, between and connecting, the islands or parts of islands belonging to the Indonesian archipelago irrespective of their width or dimension are natural appurtenances of its land territory and therefore an integral part of the inland or national waters subject to the absolute sovereignty of Indonesia. The peaceful passage of foreign vessels through these waters is guaranteed as long and insofar as it is not contrary to the sovereignty of the Indonesian state or harmful to her security.

   “The delimitation of the territorial sea, with a width of 12 nautical miles, shall be measured from straight base lines connecting the outermost points of the islands of the Republic of Indonesia.” (Announcement dated December 13 and issued on December 14, transmitted in despatch 326 from Singapore, January 16, 1958; ibid., 756D.022/1–1658)

   Telegram 1593 to Djakarta, December 28, instructed the Embassy to deliver a note objecting to the Indonesian claim of a 12-mile limit and “an alleged right to utilize a straight baseline system connecting the outermost points of its islands to convert into ‘national waters’ vast areas of high seas freely used for centuries by the ships of all nations.”

   The Embassy was instructed to make the point orally that the U.S. objection stemmed from “legal considerations relating to vital United States interests.” (Ibid., 399.731/2–2857) Telegram 1871 from Djakarta, December 31, 1957, reported that an Embassy officer delivered the note to Suwito that day and made an oral statement as instructed. (Ibid., 399.731/12–3157)