286. Memorandum From Robert W. Komer of the National Security Council Staff to President Kennedy 0
Without trying to count too many chickens before they’re hatched, we ought to capitalize on the WNG settlement by moving fast toward the “future fruitful cooperation” of which you spoke to Sukarno.1
Capital of the sort we’ve gained is a transitory asset to be used while it’s still good. Moreover, Indonesia is one of the truly big areas of East-West competition; having invested so much in maneuvering a WNG settlement for the express purpose of giving us leverage in this competition, we’d be foolish not to follow through.
Even on an austere basis, this will cost a good deal of money. But we’ve been allocating very little to Indonesia in comparison to the total $800 million in military aid and $640 million in economic the Bloc has committed. For FY 1962, for example, we budgeted $79 million economic aid (almost 70% PL–80) and $7.6 million in MAP.
Current planning is to move in fast with only $15 million for emergency aid to get export industries going again, plus $4 million in civic action. But this is far from what will be needed shortly. Indonesia’s economy is a mess, and it has been hinting it would like a cool $400–1,000 million from us. This is nonsense, but one current guess is that at least $250 million will be needed, along with some $80 million from IMF if the Indos accept a decent stabilization plan. We can probably find the money from AID contingency fund, MAP transfer authority, and perhaps Ex-Im Bank.
We’ll want to think long and hard before engaging on yet another major aid venture, but the game is worth the candle. Indonesia has more people, and perhaps resources, than the whole of mainland SEA. Yet its internal weakness makes it a tempting prize for Communist penetration or even parliamentary takeover. The PKI is the only strong and well-organized party (indeed the largest in Free Asia). The Soviets themselves are investing heavily. While not suggesting that we try to match them, we can’t afford not to compete for such a prize. Therefore to ensure that we move fast and think big, I urge you issue attached hortatory word.2 It only cranks up a planning exercise, so you’ll still be able to call a halt later if the package looks too big.
- Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, Staff Memos, Komer, 8/62. Secret.↩
- Reference is to Kennedy’s July 30 letter to Sukarno; see footnote 1, Document 282.↩
- Apparent reference to Document 287.↩