190. Telegram From the Embassy in Indonesia to the Department of State 1

2204. 1. Following message summarizes some personal opinions as to course of events in Indonesia and implications for US policy.

2. During first three weeks of December army scored considerable gains in its power struggle with the palace. During this period a prestigious triumvirate was named to direct KOTI (top policy and coordination body) with expanded powers, Subandrio was under heavy challenge, his intelligence branch (BPI) was reported to have been transferred to control of KOTI, KOTOE was abolished, Gestapu trials were announced, and left-wing political groups were being driven more and [Page 396]more to cover. A number of specific though small irritants in US-Indo relations were removed. By the end of the month there were rumors, some emanating from well informed sources, to effect that major shifts expected in January which would also see departure of Sukarno for extended trip abroad.

3. January, however, was marked by a number of set-backs for the army’s position and by a recrudescence and regrouping of palace forces. In retrospect it appears that important showdown occurred at conclusion of three-day KOTI session on December 18 when President apparently refused to ban PKI and reasserted all his old positions. Up to that point army leadership had been operating on wishful theory that President could be brought into line on such key issues as banning the PKI and reorganizing government structure to give due attention to mounting economic crisis. However, his views were set forth in such uncompromising terms during crucial KOTI session December 16–18 that all present realized he was not going to concede one inch. Question arose: What should the army and moderates now do? There followed a short period of indecision with majority of army group, led by Nasution, favoring no action to confront President Sukarno directly and decisively. Their unwillingness to tackle Sukarno may have reflected concern as to loyalty of rank and file in the military were army to find itself in open opposition to Sukarno. Army may also have rationalized that since Sukarno and his clique refused to cooperate willingly it might be better tactic to leave them in power and let them bear full responsibility for economic deterioration.

4. When it became revealed to President in late December that army was unwilling to take any concerted action against him, he saw wider scope for his operations.

5. Public reaction during first two weeks of [garble—January?] to high prices on rice, kerosene, transportation, etc. permitted the army to move behind public opinion and encourage students to take to streets denouncing PKI, Subandrio, Sukarno’s monuments and other things offensive to army and moderates. This agitation culminated on January 15 when thousands of students tried to storm gates of Bogor Palace, requiring Suharto’s personal appearance before them to urge restraint. President was obliged to promise that his economic ministers would review the situation to see whether prices could be lowered.

6. Bogor Palace episode seems to have shocked the army, as much as Sukarno, re serious consequences which army would face were these disorders to get out of hand as they almost did. Thereafter army and President were genuinely united in a resolve to prevent further disorders and to crack down on students, Moslems, and others who might go to extremes. Army made its position clear to these various groups.

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7. Net effect of recent events has been to discourage some of army’s civilian allies and give Sukarno additional leeway to maneuver. Moderate political leaders tend increasingly to regard army as untrustworthy ally that is willing to push civilian groups to fore but deserts them when Sukarno attacks. This attitude will reduce army’s ability to use such groups later.

8. Sukarno has been operating on the theory, I believe, that the longer he can delay his political solution the better chance he has of being able to accelerate realization of his cherished goals of NASAKOM and CONEFO. Possibly he feels that to announce such a solution today would invite more serious risks of counter action than to make such an announcement, say, two months from now when further divisions amongst the army, parties, religious and youth groups would have weakened his opposition. Moreover, uncertainty over political solution may feed policy differences within army itself. As long as Sukarno can sustain idea that he may ban PKI or otherwise make decision for which army leaders hope, it seems likely that a number of army voices would favor policy of “not rocking boat.”

9. On the other hand, Sukarno is obviously under a great deal of pressure from many quarters to announce his decision. There is also the compelling factor that foreign governments from which Sukarno hopes to get additional assistance and relief on debt payments will be leery about actions to help Indonesia pending clarification of political situation and more importantly evidence that Indonesia has at long last come up with sound organization and plans.

10. Although we have reports from at least two reliable sources that Sukarno may very shortly announce his political decision involving promotion of NASAKOM, there would seem to be a somewhat better chance that Sukarno will go no further at this time than announcing some limited reorganization of his cabinet that would give the appearance of providing Indonesia’s economy with better direction and organization. Such an announcement might, in Sukarno’s opinion, set the stage for sending out missions to foreign capitals looking for debt relief and credits. He might feel that this was all that was required, particularly if men selected for top economic roles both in Djakarta and on these missions enjoyed good reputations with the countries concerned.

11. Army leaders might find such a quasi-solution acceptable on several grounds. A full-scale political decision would probably involve a Sukarno announcement they would not favor, and could also touch off sharp reactions and even disorders of a nature which army obviously wishes to avoid. Moreover army would rationalize that, if economic situation continues to worsen and if missions Sukarno sends to other countries come back empty-handed, President may be forced by events [Page 398]to accept the kind of reorganization of cabinet and attention to economic problems which the army and other moderate elements seek. Hopefully Sukarno could thus be brought to heel.

12. At present and for at least the near future, Nasution seems to regard the army’s role in the power struggle as directed toward maintaining law and order and preventing any kind of excesses either from the students or Moslems, or even the Presidium. The kind of Presidium excesses which army would probably not countenance would include outright legalizing of PKI, close Djakarta relations with Peking, and actions that might isolate Indonesia even further from friends on whom army and moderates might later on have to count in accepting greater responsibility for government. I believe army would regard breaking of diplomatic relations with US to fall in this category of impermissible actions. Whether it would include unfriendly acts toward the US such as the eviction of some of its diplomats here is less certain.

13. I continue to feel that, as long as Sukarno has as much power as he has today, current political and economic chaos will continue and probably deepen, and that he will be working relentlessly to drive the revolution leftward in direction of his goals of NASAKOM and CONEFO.

Current army strategy of trying to chip away at powers of President may succeed, but there is in my opinion an almost equal chance that President can successfully divide and conquer his opposition.2

14. US capabilities to shape events are very slight, but we do have some common interests with countries like Japan which have aid programs and considerable influence in Indonesia. If these countries require a realistic attack by GOI on its basic economic problems before they are willing to grant Indonesia relief on debts and to extend further credits, this might in itself have a salutary impact and could strengthen the hands of those in Indonesia who seek such changes.

15. It might be useful to draw upon this theme in our discussions with the countries concerned taking extreme care, of course, not to expose ourselves to any appearances that we trying to get friendly [Page 399]countries to gang up against Indonesia. As Embtel 2195 points out,3 donor countries have reasons enough to require reasonable assurance re Indonesia’s economic and other policies before extending additional assistance.

Green
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–9 INDON. Secret; Priority. Repeated to Canberra, CINCPAC for POLAD, Bonn, London, Medan, Paris for NATUS, Tokyo, and Surabaya.
  2. The Office of Current Intelligence at CIA, produced an Intelligence Memorandum, OCI No. 0494/99, February 4, entitled “Paralysis in Indonesia.” It concluded that neither Sukarno nor the Army were able to impose their will on the other, but Sukarno believed that time was on his side in achieving his goal of reestablishing himself at the center of Indonesia political life and reviving the left in Indonesia. (Johnson Library, National Security File, Country File, Indonesia, Vol. VI, 11/65–5/66) In telegram 2260, February 9, Green reported a conversation with Malik in which Malik’s “interpretation of events and trends almost entirely accord with view I expressed in Embtel 2204.” Green reported that Malik added additional information on the disintegration of Indonesia’s economy and the political consequences. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–9 INDON)
  3. Dated January 31. (Ibid., POL 2–3 INDON)