Foreign Relations of the United States, 1958–1960, Indonesia, Volume XVII

160. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Robertson) to Secretary of State Dulles⁰

Washington, October 15, 1958.

SUBJECT

• Indonesia: Future U.S. Actions

Discussion:

On August 1 you authorized several steps to be taken, including token military aid, to strengthen the hand of the Indonesian Army and as an indication of our support of the anti-Communist elements in Indonesia (Tab A).¹ The bulk of the equipment provided for in the token arms program will have been delivered by December 1. Because of Dutch objections, however, delivery dates for three L–20 liaison planes for the Army and three helicopters for the Air Force included in the package have not been determined.

These actions have produced in Indonesia a very favorable reaction, and with the postponement of elections and the likelihood of relative political stability for a minimum of two years, our Ambassador has recommended we proceed with programs of economic and military assistance designed to strengthen anti-Communist elements and re-enforce Indonesian ties with the West (Djakarta telegram 1113, Tab B).²

The Netherlands Government fears that Indonesia will attempt to take West New Guinea by force and is strongly opposed to Indonesian acquisition of arms and military equipment from any Western source. Failing a complete embargo, the Dutch request that the U.S. supply no “offensive” arms and ask its NATO partners to refrain from selling arms to Indonesia. The Australian Government, both for internal political reasons and because of Dutch pressure, has expressed concern over U.S. supply of “offensive weapons,” but is in basic agreement with present U.S. policy. The British Government, although not prepared to sell heavy military equipment to Indonesia “at this time”, has informed the Indonesians it will sell them some radar equipment. The Germans have also recently informed the Indonesians that they are going ahead with the delivery of some speedboats for the Navy.

The recent trend in developments in Indonesia has been in general favorable (Tab C).³ The postponement of elections is a concrete, major step in the right direction, and despite greatly intensified Soviet Bloc efforts to press economic aid on Indonesia, the government and the military establishment clearly prefer closer ties with the U.S. I feel that we should proceed immediately to press our advantage both in the military and civil sectors. There are recognized risks and we can not be certain to succeed, but to turn our back on Indonesia would bring almost certain failure.

The Department of Defense has recommended that further actions be taken in the military field to maintain the favorable momentum created by the token aid program (letter dated October 7, 1958 from Mr. Irwin to Mr. Dillon, Tab D).⁴ Admiral Burke, in a personal letter to me, has expressed his feeling of urgency that we proceed with further assistance (Tab E).⁵

Whatever the validity of Dutch and Australian fears, the security of West New Guinea from Indonesian attack can certainly not be obtained by denying to Indonesia western sources of economic and military assistance and permitting unobstructed Soviet Bloc infiltration from without and Communist subversion from within, to say nothing of an unlimited supply of Soviet Bloc arms and ammunition.

Recommendation:⁶

That you approve:

1. The following military program:

a. Prompt completion of the August 1 token military assistance program in its entirety, that is, the delivery of three L–20 liaison planes for the Army and three helicopters for the Air Force.

b. An augmented program of military assistance, as recommended by Mr. Irwin in his letter of July 31 (Tab F),⁷ to be financed under Title I of the Mutual Security Act of 1954, as amended, subject to a Presidential determination under Section 451 of that Act.

c. A continuing limited program of military assistance to Indonesia contingent upon future internal developments, and subject to the criteria and guidelines outlined by W/MSC in its memorandum of October 18, 1958 (Tab G).⁸

2. Removal of restrictions on the issuance of export licenses for:

a. All types of civil aircraft.

b. Subject to the approval of the regional bureau, the following equipment and supplies for military and civil use: surplus, propellor-driven military aircraft; small arms and ammunition; and surplus landing craft for police and civil use, since it is inconsistent and self-defeating that we supply arms for local currency under a military sales program and refuse to permit Indonesia to buy for dollars equipment commercially available in the U.S.

3. A program of increased economic assistance utilizing the several available types of economic aid. Among the projects currently under consideration are:

a. A loan of $2.7 million from the DLF for railroad rehabilitation in South Sumatra.

b. Negotiation of a new PL–480 agreement to provide rice and other surplus agricultural commodities.

4. Informing the Ex-Im Bank that for political reasons we wish them to proceed with consideration of projects in Indonesia meeting their criteria. Projects under consideration include:

a. Urea fertilizer plant ($30 million).

b. Thermal power project, Surabaya ($9.4 million).

c. Dredges for land development and reclamation in Borneo and Sumatra ($6.9 million).

d. Lockheed Electras for Garuda ($12 million).

5. That we inform the Netherlands and Australian Governments that we intend to proceed with programs of assistance to Indonesia in the military and economic sectors, that we intend to proceed with their views and concerns very much in mind, that we will inform them of the nature of these programs as they are decided upon, and that we will take all appropriate occasions to impress on Indonesia that we would be strongly opposed to the use of military force in an attempt to resolve the West New Guinea dispute.⁹

0. Source: Department of State, Central Files, 611.56D/10–1558. Secret. Drafted by Underhill and cleared by Barnes, Mann, Murphy, and Parsons.
1. Tab A summarized the actions authorized on August 1. See Supplement.
2. Telegram 1113, September 29, analyzed the current state of U.S.-Indonesian relations and made certain spectific recommendations for augumented U.S. military and economic aid. (Department of State, Central Files, 756D.00/9–2958) See Supplement.
3. Tab C summarized the recent pro-Western and anti-Communist actions taken by the Indonesian Government. See Supplement.
4. Document 158.
5. Dated October 8. (Department of State, Central Files, 741.5622/10–858) See Supplement.
6. Dulles initialed his approval of all five items.
7. See footnote 3, Document 139.
8. Not found.
9. In an October 30 memorandum to Dulles, Elbrick offered EUR’s appraisal of Robertson’s October 15 memorandum. Regarding recommendation 2(b) he explained that EUR believed that the Dutch would object to the commercial sale of surplus propeller-driven military aircraft and surplus landing craft for police and civil use and suggested that Dutch reaction could be better handled if the sales remained on a government-to-government basis. (Department of State, Central Files, 756D.5–MSP/10–3058) See Supplement. On November 5 Dulles approved the augmented aid program recommended by Robertson, taking into account EUR’s position; see Document 161.