Attachment2
COMMENTS ON AUSTRALIAN PAPER ON “NEGOTIATIONS WITH
DISSIDENTS”
Handed to the Secretary by Minister Casey on November 4, 1959
1. United States Position
It is the policy of the United States Government to encourage a
reconciliation between the rebels and the Central Government. We
feel that such reconciliation, however, should take place only on
the basis of mutually acceptable terms. We would hope that such
terms would not mean complete surrender by the dissidents as
demanded at this time by the Government. The dissidents still
represent an anti-Communist force which cannot be ignored by the
Central Government in determining its policies and which could be
used as a rallying point should the Communists take over in Java. We
would hope, therefore, that any negotiations for settlement of the
rebellion would result in attainment of some of the original
objectives of the dissidents and in strengthening the anti-Communist
forces in Indonesia. The following are some of the reasons for this
policy:
- a)
- Continued P.R.R.I. activity is of primary interest to the
Communists since they thrive on chaos. They have been taking
full advantage of the political differences resulting from
the rebellion as well as of the deteriorating economic
situation in the country.
- b)
- Continuation of the rebellion will serve only to weaken
further the economy. The expense of the rebellion is
reported to be about one-half of the total budget, which is
a considerable drain of funds. This cost is being met
primarily through the issue of new bank notes, resulting in
growing inflation. This trend will negate any beneficial
effects which might have resulted from the August 24
monetary measures. On the other hand, re-establishment of
the Government’s authority in North and Central Sumatra and
North Celebes, which areas are important foreign exchange
earners, would assist the Government in improving its
foreign exchange position.
- c)
- Further deterioration in the economy will only increase
the amount of foreign aid which eventually might be
necessary to put Indonesia back on its feet, and since we
presumably would be one of the major sources of such aid, it
would be in our interest that the economic situation not
deteriorate further.
- d)
- A settlement of the rebellion would permit the Government
to devote all of its resources, manpower and energy to other
serious problems now facing Indonesia which must be resolved
before the country can move forward.
- e)
- A reconciliation with the rebels would facilitate the
return to active participation in the political scene of men
like Hatta and would
serve to remove one of the irritants among the non-Communist
political parties. A settlement would create a climate for
non-Communist and anti-Communist elements to join forces
against the PKI.
- f)
- Continuation of the rebellion would tend to increase
Indonesia’s suspicions of foreign assistance to the rebels.
The rebels are in very serious trouble and their continuing
ability to carry on for any length of time would only be
interpreted by the Government as an indication that they
were being assisted from outside. This suspicion would be
directed primarily at us, the Republic of China and the
Philippines, making our relations with Indonesia more
difficult.
- g)
-
Settlement of the rebellion would not weaken the
position of Nasution and the Army but on the
contrary would permit him to concentrate his efforts on
the PKI. Inability on
his part to settle the rebellion might in fact weaken
his position in the long run. It does not necessarily
follow that the state of emergency would be rescinded
following a settlement of the rebellion but even if this
were to be the case, we would not perceive any
diminishing of effective Army control over the country,
particularly in the outlying regions. The Army’s
influence in the formulation of Government policy—e.g.,
the postponement of national elections—would also
continue.
The settlement of the rebellion would have to have at
least the tacit approval of Sukarno. However,
given the evidences of the Army’s ability to influence
Sukarno
in the past (e.g., the formation of the new Government
last July, the Attorney General affair),3 we do
not believe that it is beyond the realm of possibility
that Sukarno
would acquiesce to some sort of settlement. The
Australian view that Sukarno would feel that a settlement
would precipitate a major breach between himself and the
PKI is, we believe,
invalid. It might be pointed out that Sukarno has
approved the current Army-inspired drive against the
Chinese retailers in Indonesia, which action has caused
considerable unrest in the PKI.
[Page 447]
Sukarno’s
antipathy toward the rebel movement is predicated, on
the contrary, on his feeling that the rebels have
betrayed the revolution.
- h)
- A settlement would diminish the military strength of the
P.R.R.I. although the rebel movement would likely retain
some psychological influence. However, as the Australians
have pointed out, the P.R.R.I. position is likely to
diminish in any event over the next two or three years. On
the other hand, a settlement would eliminate or at least
substantially reduce the conflict between the two leading
anti-Communist forces in Indonesia.
- i)
- We do not believe that a settlement of the rebellion would
substantially increase the danger of an Indonesian attack
against West New Guinea. By far the most significant
deterrent to such action has been statements by the United
States and the UK to the
Indonesian Government setting forth our strong opposition to
any use of force against this territory. This political
deterrent would remain effective even if the rebellion were
settled.
Summary of United States
Position
To sum up the foregoing comments briefly, a major United States
policy guidance is to encourage reconciliation between the rebels
and the Indonesian Government. The emergence of the Indonesian Army
in the past 18 months as the major anti-Communist force in that
country and a number of Army inspired and directed actions during
this period have been successful in curtailing and in obstructing
Communist political activities in Indonesia. While the growth of the
Communist machine has certainly been slowed and possibly halted in
some areas, in all likelihood none of its essential parts has been
damaged. It appears probable that the Army can continue to contain
the PKI at least in the short run.
However, given the serious continuing political and economic
problems created in large part by the rebellion, it does not appear
possible for the Army and the Government to take any major steps
against the PKI until these problems
are resolved or at least diminished. Thus, in the long run the
prospects of achieving United States objectives in Indonesia do not
appear to be bright unless and until greater political and economic
stability is brought about in that country. In other words, there
can be little hope for a permanent reduction of the power of the
Communist party unless the chaotic internal situation on which
Communism thrives is eliminated. The most significant step which
could be taken in this direction at the present time would be a
reconciliation of opposing non- or anti-Communist elements,
specifically the Army and the P.R.R.I. What we would lose in the
diminishing of the power position of one anti-Communist element (the
P.R.R.I.) would certainly be more than an equivalent gain in the
consolidation and strengthening of anti-Communist forces to meet the
PKI threat.
[Page 448]
2. Australian
Intercession
Whether they should accede to Nasution’s request is a matter for the Australians
themselves to decide. While negotiations between the Indonesian
Government and the P.R.R.I. would seem to us to be a matter for the
Indonesians themselves, it might be pointed out that such
negotiations have taken place off and on over the past several
months with no apparent success. The latest attempt to achieve a
reconciliation is evidenced by Lt. Col. Sukendro’s trip to Singapore and Europe to discuss
possible terms with rebel representatives. Although the results
cannot be predicted, intercession by a third party could possibly
pave the way to a settlement. We would perceive no objection to the
Australians exploring this matter further if they should so decide.
We agree, however, that if the matter is pursued the dissidents
should not be pressed to accept the terms at present offered by the
Central Government, since this would amount to a surrender and would
only undermine the confidence of the P.R.R.I. leaders and other
potential rebels in Western support. One problem which might be
faced if the Australians should determine to intercede is that the
rebel group outside Indonesia which the Australians would approach
might not necessarily represent all the rebels still in Indonesia
and consequently any terms worked out would not necessarily be
accepted by all elements within the P.R.R.I.
(Discussed with Mr. Krebs and the Agency and cleared in draft by Mr.
Parsons.)
