129. Telegram From the Department of State to the Embassy in Indonesia0

3911. For Ambassador from the Secretary. Supplementing Deptel 39011 you may also wish to point out to the President that while the Government has dealt with the overt and organized aspects of the rebellion it cannot, without moving away from Communism, deal with the economic or underground aspects of the problem.

The rebels have not been exterminated to any appreciable extent. They have been driven underground where they remain as embers which could flare up to keep the economy and the solvency of the nation in a precarious state. The economic prospect is indeed bleak unless the GOI can assure good long-term relations with the free world nations which regard Communism as their enemy. The Soviet bloc has ample surplus military equipment. But it cannot provide the markets which Indonesia requires for its natural products nor can it provide the agricultural products which the West, notably the United States, possesses in surplus, but which are in very short supply in the Soviet Union and China. The Communist leaders in Indonesia, probably taking orders from outside, may, like International Communists everywhere, be indifferent to human misery if it gives them opportunity, and they may feel that it is to their political advantage to invite economic and fiscal chaos on the theory that where such chaos exists they can increase their political power. But surely this is not in the interest of the people or Government of Indonesia.

  1. Source: Department of State, Central Files, 756D.00/6–2858. Top Secret; Priority; Limit Distribution. Drafted and approved by Dulles.
  2. Document 128.