335. Memorandum From Clifford L. Alexander of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)0

The oil negotiations were successfully concluded as of today.1 This is one of the very few bright signs that have come out of Djakarta in the past week. It might be appropriate for us to examine how it would be possible to create some further softening of feelings in the region.

The Manila meeting of Indonesia, Philippines and Malaya established, among other things, the spirit of Maphilindo.2 Talk of reestablishment of this spirit has subsided with the positive findings of the Secretary General’s survey team and the virtual rejection of same by both the Indonesians and the Filipinos. The approaches taken by the Philippines and Indonesia toward the new Malaysia have been different, despite the fact that they have reached the same conclusion, i.e., non-recognition. The Philippine position has been based, according to Macapagal, on the failure of the Tunku to assure the Philippines that their alleged claims to North Borneo territories will be negotiated by the new Malaysia. It is Macapagal’s position that the Tunku, speaking for Malaya at the Manila meeting, promised that the Philippine claims would be fairly adjudicated. Macapagal’s present “legal” position is that Malaysia is a new and separate entity and, therefore, it is required that the Tunku make assurances to the Philippines speaking for the new Malaysia.

The Philippines had some objections to the survey by the Secretary General which established that the majority of Sabah (North Borneo) and Sarawak were in favor of joining Malaysia but the Philippines did not fail to recognize Malaysia based on inadequacies of the UN survey. It has [Page 728] appeared that the Philippines wanted to appease the Indonesians but after the outburst of violence would like to have some face saving device which would permit them to recognize the new Malaysia. This face saving device would be for the Tunku to assure the Philippines that the new Malaysia will adhere to the promises of the old Malaya concerning the adjudication of Philippine claims in North Borneo.

Further, if the Tunku were to indicate that he would be willing to come to a summit meeting on some neutral ground in order to “reestablish” the spirit of Maphilindo, this would place Macapagal in a position of almost having to recognize Malaysia. The Tunku might suggest that a meeting of Macapagal, Sukarno, and himself be held on neutral ground, i.e., Thailand.

The Indonesian position appears to be formulated from day to day. The recent settling of the oil contracts perhaps indicates that Sukarno would like some form of face saver to be presented by the Tunku. Sukarno has now made his noises and indicated through his belligerency his strength in the area and perhaps he is ready to logically consider the economic consequences of breaking trade relations with Malaysia. Sukarno has indicated that he would be willing to come to a summit meeting. If the Tunku were to propose a summit meeting on neutral grounds and not set the precondition that Indonesia recognize Malaysia before this summit meeting, Sukarno might be placed in a position where he would feel it necessary to attend.

The breaking of trade relations with Malaysia will have serious economic consequences on both countries. It would, therefore, seem to be appropriate for the Tunku to swallow some pride and attempt to achieve normalcy. Malaysia is second only to Japan in the area as far as economic well being is concerned and any continued breach with Indonesia is bound to affect this position.

Any pressures we might place on the Tunku directly through Ambassador Baldwin or indirectly through the British, should logically take place now. Our major negotiating point with the British is the letter sent by the President to Macmillan yesterday where the President stated and did convey to Sukarno his “happiness” that Indonesia was successfully concluding negotiations with all three oil companies.3

In summary, we would want the Tunku to do the following things:

Tell Macapagal that pledges made at Manila re North Borneo were still applicable.
Express to Macapagal and Sukarno a willingness to meet at the summit on some neutral ground.
Express the hope that the spirit of Maphilindo can move forward toward the goals outlined at the Manila summit meeting.4
Cliff Alexander
  1. Source: Kennedy Library, National Security Files, Countries Series, Indonesia, Vol. V, 9/63. Secret.
  2. Regarding the negotiations between the Indonesian Government and the Western oil companies, see Documents 306 ff.
  3. See footnote 2, Document 332.
  4. The text is in Tosec 42 to USUN, September 24. (Department of State, Central Files, PET 15–2 INDON)
  5. Komer read this memorandum and told Bundy he agreed with it. “The problem,” according to Komer, “is to work out some face-saving compromise to give Sukarno, Tunku and Macapagal a way out. Logical way to do so would be ‘summit’ reconciliation meeting on neutral ground.” Komer thought “the guts of the matter” was to press Tunku Abdul Rahman “hard enough now to bend now that he had won.” Komer suggested Baldwin and Macmillan should be urged to do so with the Tunku. (Kennedy Library, National Security Files, Countries Series, Malaya and Singapore, 8/63–9/63)